Apple Q3 Results & iWatch Patent

Apple released its third quarter results today for the period ending June 28, 2014. The company earned $7.7b ($1.28 eps) on $37.4b in revenue. Both sales revenue and iPhone volume came in under analyst forecasts spurring a mixed reception.

Few highlights:

  • gross margin of 39.4%
  • largest revenue growth (28% YoY) in China
  • iPod volume (-36%) and revenue (-40%) down over the past year
  • double digit revenue growth YoY in Mac, iTunes, and accessories
  • NASA uses 26,000 iPhones, education space has bought 13m iPads
  • App store has paid $20b to developers, half in just the past year

Q4 guidance:

  • revenue between $37 and $40b
  • gross margin between 37% and 38%
  • OPEX between $4.75 and $4.85b
  • other income of $250m
  • tax rate of 26.1%

After closing slightly up for the day shares traded down in after hours. Stellar growth over the past decade has set the bar high leaving investors bored with recent performance. Regardless of sentiment, Apple’s sales, margin and unit volume rival any company in the world.

Apple AAPL Q3 Earnings Stock Volume

If you’re interested in more visuals, QZ put together some nice charts summarizing Apple’s results and Asymco provided great coverage of Cook and Maestri’s conference call.

Apple was also granted a comprehensive smartwatch patent today. In describing what the patent calls iTime, “the electronic device can utilize the additional electrical circuitry or devices provided within the electronic wristband to augment the capabilities of the electronic device.” The long discussed project has yet to officially appear but rumors are for a fall unveil and holiday or early 2015 launch.

Apple iWatch Patent July 2014