Apple likely set the world record for quarterly earnings on Tuesday with $18 billion, a figure that beat Russian oil company Gazprom’s 2011 record of $16 billion. Oil companies are the only entities that give Apple a run for its money. The latter was the company that Apple battled with for months to become the world’s most valuable company in January 2013.
Among tech companies, it’s not even close and it hasn’t been for a while. Apple became worth more than Microsoft and Intel combined in 2011 and has left the rest of the industry in the dust since.
Now that its December numbers have rolled in, Apple’s hegemony is even more striking. Consider that at $18 billion, Apple’s quarterly profit dwarfed Google’s fiscal 2013 annual profit of $12.9 billion. Apple quarterly numbers were also comparable to Microsoft’s full-year numbers for its fiscal 2014. Microsoft reported $86.8 billion in revenues and $22 billion in profits for the year vs. $74.6 billion and $18 billion for Apple’s fiscal first quarter, respectively.
Apple’s stellar results contrast with its rivals, which have fumbled lately. Samsung reported a 60% drop in its operating profit in its most-recent quarter, in October. Google, which is expected to report its latest numbers on Thursday, missed forecasts last quarter as revenues failed to keep pace with expenses.
Amid Google and Samsung’s troubles, Apple launched the iPhone 6 and iPhone 6 Plus models, which consumers greeted enthusiastically since there hadn’t been a major iPhone upgrade in two years. The launch was global and the phones were a big hit in China. Apple became China’s top smartphone brand in that country for the first time in the fourth quarter, according to researcher Canalys.
The global nature of Apple’s sales explain why the company’s sales were so huge: As Apple noted, 65% of its sales were international this quarter. In the comparable quarter in 2012, that figure was 58%. Another factor buoying results is the iPhone’s average selling price (ASP), which climbed to $687 after the release of the two iPhone 6 models.
In particular, the iPhone 6 Plus costs $100 more unsubsidized than the iPhone 5S did. It also costs $100 to upgrade from the standard 16GB to 64GB and then another to get to 128GB. While Apple hasn’t offered a breakdown of iPhone 6 Plus sales versus iPhone 6’s, clearly having a more expensive phone in the mix has helped boost revenues overall. The higher prices didn’t hurt iPhone sales, since, at 74.5 million units, they are a new record for the company. As CEO Tim Cook boasted during a call Tuesday with analysts, Apple sold 34,000 iPhones an hour — every hour last quarter.
The combinations of continued international expansion and average selling prices and two years of pent-up demand all contributed to an epic, blowout quarter. For Apple, it will be a hard act to follow, but not an impossible one. Read more…