Apple Scores Another Beat

Back in September, Apple said it expected revenue and gross margins for its fourth quarter to fall "near the high end" of the range it had previously provided - $34 billion to $37 billion, and 36 percent to 37 percent.

Today, it delivered on that promise.

Posting fourth-quarter financials after market close Monday, Apple reported earnings per share of $8.26 on revenue of $37.5 billion. That's well above the $7.92 on revenue of $36.82 billion analysts had predicted, and at the higher end of Apple's own range of guidance for the period, though it was down on a per-share basis from $8.22 billion, or $8.67 a share, a year earlier. Apple said its gross margins were 37 percent, right in line with expectations.

Apple said it sold 33.8 million iPhones for the quarter, 14.1 million iPads and 4.6 million Macs. Analysts were expecting iPhone sales of 33.4 million units, iPad sales of 13.9 million units and Mac sales of about 4.2 million units.

Apple declared a cash dividend of $3.05 per share payable on November 14, 2013, to shareholders of record as of the close of business on November 11, 2013.

"We're pleased to report a strong finish to an amazing year with record fourth-quarter revenue, including sales of almost 34 million iPhones," CEO Tim Cook said in an earnings release.

Apple's guidance for next quarter, perhaps the most closely watched data point of all today: Revenue of between $55 billion and $58 billion, and gross margins of 36.5 percent to 37 percent. Analysts had been looking for revenue of $55.53 billion.

Apple stock is trading down more than three percent after hours.

Notes from the call

• $16 billion in revenue from iTunes software and services.
• 400 million visitors to retail stores. $50 million in revenue per store.
• Completed 15 strategic acquisitions. That's one acquisition every three to four weeks.
• Greatly appreciate "suggestions" from shareholders about capital allocation. Will announce any changes to capital allocation program in the first part of 2014.
• Sold 33.8 million iPhones versus 26.9 million in the same period in the year prior. Increase of 26 percent, a new September quarter record.
• Experian says iPhone users spend 53 percent more time each day on their devices than Android users.
• Sold 14.1 million iPads this quarter versus 14 million in same quarter last year.
• Sales of Macs exceeded expectations. Down 4 percent year over year, but overall PC market was down 10 percent.
• Planning 30 new stores in fiscal 2014, two-thirds outside the United States.
• Company has $146.8 billion in cash; 76 percent of that is offshore ($111.3 billion).
• Cook on 64-bit processor in iPhone 5s and new iPads: "This is the front end of a long roadmap."
• Cook on iPhone 5c pricing: "If you look at what we've done, we're selling the iPhone 4s as our entry level offering. We sell the iPhone 5c as a mid-tier device. And then we have the iPhone 5s at the high end. Obviously some people read rumors about the 5c being an entry-level device, but that was never our intent."
• Cook says he stands by his statement that we will see exciting new products from Apple across 2014. "We believe we can use our skills to build new categories in areas where we do not participate today. We're confident in that."
• Cook on China: "We had a pretty good quarter in China, but want to do better." IPhone units were up 26 percent year over year despite constraints around iPhone 5s. For full year, Greater China generated $27 billion, up 14 percent year over year.
• Cook on the tablet market and Apple's new iPad lineup: "We continue to view the tablet market as huge. We see it as a large opportunity for us. We are not solely focused on unit share, we are focused on usage share and customer loyalty and other things that are important to us. ... We're confident we will grow strongly year over year. We're getting things off to a great start this weekend with iPad Air and later in the month we'll begin shipping the new mini. ... We did feel that we wanted to reduce the price of the iPad mini and now we're coming in at $299. ... IPad Air is the best iPad we've ever done. We believe these products are going to do really well. We think it's going to be an iPad Christmas."
• Cook on Apple's decision to offer iWork, iLife and Mavericks for free: "We wanted to make this software part of what it meant to own a Mac and an iOS device. IWork had become the best-selling productivity app on a mobile device, we wanted all of our customers to have access to it so they could have the best features. ... Other folks charge for their OS and productivity apps. We wanted to make it a part of the experience."
• Cook on iPhone 5s and iPad supplies: "The 5s ended the quarter with significant backlog, but supply is building each week. [We're] very confident in ability to keep ramping. In terms of Retina mini, we'll start shipping later in November. We know how many we can make, but we won't be able to assess demand until we ship ... it's unclear when supply and demand will be in balance there. ... We will see how we do on iPad Air as we go out this week. I think we'll have a very good weekend, but I'm not sure everyone who wants one will be able to find one."