Just recently, Apple announced its quarter results for Q4 2011 in the conference call on Oct. 18, 2011. This was the first conference call conducted after Steve Jobs sadly passed away. Tim Cook mentioned Steve Jobs in the call as creative genius and amazing human being. Steve was great leader and mentor and inspired everyone at the company to do great things.
With the fourth-quarter result, Apple (AAPL, Financial) set the all-time quarterly record for Mac and iPad sales, and a new September quarterly record for iPhone sales. The revenue was $28.3 billion for the quarter, achieving very high year-on-year growth of 39%, driven by sales of the iPad, Mac and iPhone. Operating margin was 30.8% of total sales at $8.7 billion whereas net income was $6.6 billion, a growth of 54% year-on-year.
It was quite amazing to hear in the conference call the adoption of iPhone across businesses. Tim Cook said that iPhone kept ranking higher in the consumer report Wireless Consumer Smartphone Customer Satisfaction survey. It was adopted as a standard across the enterprise with 93% of the Fortune 500 deploying or testing the device, up from 91% last quarter ad 60% of Global 500 testing or deploying iPhone, 300 basis points higher from the last quarter. For the enterprise which uses iPhone, Tim described the story of Lowe’s. Lowe’s was in the process of rolling over 40,000 iPhones with custom application for the store associates to execute real-time inventory checks, product orders and they can even interact with customers with how-to-video. In addition to Lowe’s, corporate networks that use iPhones includes L’Oreal, Royal Bank of Scotland, SAP, Texas Instruments, Tenet Healthcare, Jaguar Land Rover, etc.
The three-digit growth has been recognized in the iPad products, with the volume of 11.1 million iPads during September compared to 4.2 million in same quarter last year, with an increase of 166%. The company realized from the beginning that the tablet market was huge opportunity for Apple. The revenue of iPad and its accessories for the quarter was $6.9 billion, compared to $2.8 billion last year, growth of 146% year on year.
The same trend occurred with the iPhone; businesses have deployed iPad for their employees. 52% of the Global 500 was testing or deploying iPad, up from 47% last quarter. Tim pointed out that the airline industry was a great example of using iPads for business. United Continental Holdings has put iPads in every cockpit to replace heavy paper-based flight bags, and Japan’s All Nippon Airways is now using iPads in training programs for flight attendants. Sony Automotive is using the iPad for customer check-ins at their service department and also to provide analytics to regional managers. Aflac, Biogen and General Mills have developed internal apps for sales team leverage daily, and technicians at Siemens Energy are bringing iPads along when they do maintenance work at the top of their wind turbine.
So iPhones and iPads were often thought of as for entertainment only. Now they are proving that they can be used quite efficiently for business purposes. And they have spread across a lot of enterprises worldwide. That really poses a threat for push-email secured server Blackberry which belongs to RIMM. However, we need time to see the security level of Apple’s products compared to the secured server of RIMM. It is still not very certain at the moment.
For the next quarter outlook, Tim expects revenues to be around $37 billion compared to $26.7 billion in the December quarter last year. The gross margin would be around 40% including the $60 million for stock-based compensation expense. The operating expense would be $3.25 billion and the EPS was targeted at about $9.30.
The growth of Apple has been marvelous over the past five years. However, the current valuation is quite modest compared to the average five-year time horizon. The average five-year P/E is nearly 25, 50% more than the current TTM P/E of 16.7. The issue is whether Apple can keep its strong growth sustainably in the future without the most talented and visionary leader, Steve Jobs.
With the fourth-quarter result, Apple (AAPL, Financial) set the all-time quarterly record for Mac and iPad sales, and a new September quarterly record for iPhone sales. The revenue was $28.3 billion for the quarter, achieving very high year-on-year growth of 39%, driven by sales of the iPad, Mac and iPhone. Operating margin was 30.8% of total sales at $8.7 billion whereas net income was $6.6 billion, a growth of 54% year-on-year.
It was quite amazing to hear in the conference call the adoption of iPhone across businesses. Tim Cook said that iPhone kept ranking higher in the consumer report Wireless Consumer Smartphone Customer Satisfaction survey. It was adopted as a standard across the enterprise with 93% of the Fortune 500 deploying or testing the device, up from 91% last quarter ad 60% of Global 500 testing or deploying iPhone, 300 basis points higher from the last quarter. For the enterprise which uses iPhone, Tim described the story of Lowe’s. Lowe’s was in the process of rolling over 40,000 iPhones with custom application for the store associates to execute real-time inventory checks, product orders and they can even interact with customers with how-to-video. In addition to Lowe’s, corporate networks that use iPhones includes L’Oreal, Royal Bank of Scotland, SAP, Texas Instruments, Tenet Healthcare, Jaguar Land Rover, etc.
The three-digit growth has been recognized in the iPad products, with the volume of 11.1 million iPads during September compared to 4.2 million in same quarter last year, with an increase of 166%. The company realized from the beginning that the tablet market was huge opportunity for Apple. The revenue of iPad and its accessories for the quarter was $6.9 billion, compared to $2.8 billion last year, growth of 146% year on year.
The same trend occurred with the iPhone; businesses have deployed iPad for their employees. 52% of the Global 500 was testing or deploying iPad, up from 47% last quarter. Tim pointed out that the airline industry was a great example of using iPads for business. United Continental Holdings has put iPads in every cockpit to replace heavy paper-based flight bags, and Japan’s All Nippon Airways is now using iPads in training programs for flight attendants. Sony Automotive is using the iPad for customer check-ins at their service department and also to provide analytics to regional managers. Aflac, Biogen and General Mills have developed internal apps for sales team leverage daily, and technicians at Siemens Energy are bringing iPads along when they do maintenance work at the top of their wind turbine.
So iPhones and iPads were often thought of as for entertainment only. Now they are proving that they can be used quite efficiently for business purposes. And they have spread across a lot of enterprises worldwide. That really poses a threat for push-email secured server Blackberry which belongs to RIMM. However, we need time to see the security level of Apple’s products compared to the secured server of RIMM. It is still not very certain at the moment.
For the next quarter outlook, Tim expects revenues to be around $37 billion compared to $26.7 billion in the December quarter last year. The gross margin would be around 40% including the $60 million for stock-based compensation expense. The operating expense would be $3.25 billion and the EPS was targeted at about $9.30.
The growth of Apple has been marvelous over the past five years. However, the current valuation is quite modest compared to the average five-year time horizon. The average five-year P/E is nearly 25, 50% more than the current TTM P/E of 16.7. The issue is whether Apple can keep its strong growth sustainably in the future without the most talented and visionary leader, Steve Jobs.
