Apple's Fourth Quarter 2009 Earnings Report: Better Than Ever

By Graham K. Rogers


On Monday last (19 October) Peter Oppenheimer, Apple's Chief Financial Officer,. reported the Corporation's record figures for its Fourth Quarter of 2009. Despite the weak economic environment, sales of Macintosh computers were up, as were sales of iPhones and the iPod touch. Profits were the best ever reported and Apple's cash reserves now stand at US$34 billion, despite pre-payments to Toshiba for NAND flash chips.

Oppenheimer wasted little time in his presentation and launched into the figures quickly after a brief introduction. The reported revenue of US$9.87 billion produced a profit of $1.67 billion up from $7.9 billion revenue and profit of $1.14 billion for the same quarter last year. Gross margin increased from 34.7% to 36.6% in the same period. Some 46% of that income was from international sales. The Asia-Pacific region showed 42% growth.

Sales of Macintosh computers were 17% higher at 3.05 million units, with portable computers accounting for 74% of that figure, while iPod sales were down 8% at 10.2 million. However, 7.4 million iPhones were sold (7% increase) and sales of the iPod touch doubled, suggesting a shift to the higher end of the market. The iPhone is to become available later this month in China, Oppenheimer reported. He added that carrier relationships in the UK and Canada will expand. The iPod accounts for over 70% of the MP3 market in the US and is the largest seller worldwide.

Sales of software increased with Snow Leopard produced double the sales of the previous operating system released, Leopard. Sales at the 23 iTunes store increased, while the App Store, sold some half a billion apps in the last quarter. Sales of accessories, handsets and carrier income increased by some 185% from $806 million to $2.3 billion.

In addition, Oppenheimer told a questioner that lower profits were expected in the next quarter partly due to increases in component prices as well as an anticipated increase in shipping charges. Along with this, there were suggestions in the presentation of price drops and an "abnormal impact" for the next quarter: these comments suggest a new product may be available soon.

During the last few months a number of companies, including Apple, were able to convince authorities that the way they reported revenue from services (like the iPhone spread over 2 years) should be changed. This means that a more realistic idea of how much is coming in. This accounting change will be introduced some time in the next 12 months. Unusually, Apple share prices rose after the conference call to just under $190 but reached over $200 in after hours trading.

Graham K. Rogers
20 October 2009

See also this week, Filling in Some Gaps: iPhones, Macs and OS X


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