Apple Reports Fourth Quarter Results
CUPERTINO, California—October 18, 2011—Apple® today announced financial results for its fiscal 2011 fourth quarter ended September 24, 2011. The Company posted quarterly revenue of $28.27 billion and quarterly net profit of $6.62 billion, or $7.05 per diluted share.
Context & Ripple Effects
This is the latest entry in a reporting cadence Apple has run every quarter since at least its October 2007 results and October 2008 results, but this one landed differently: the $28.27 billion quarter came in below the Street's expected $29.3 billion on revenue and $7.27 EPS, and the pickup was unusually broad — six outlets covering the same release from six angles, from the miss itself to the balance sheet to China.
The sub-stories inside the release explain why. GigaOM framed China as Apple's second-most important market; AppleInsider counted the cash hoard at $81 billion with two-thirds held offshore; TechCrunch noted management guiding to record iPhone and iPad sales and hinting at a $40 billion December quarter. All of this lands two weeks into an iPhone 4S launch that is already selling on reservation-only at U.S. and Canadian retail stores.
First-order effects
- Apple missed consensus on revenue, EPS, and iPhone unit sales for the first time in this multi-year reporting streak, and the stock sold off hard on the print.
- Management offset the miss with unusually aggressive forward guidance — record iPhone and iPad shipments projected for the December quarter, with a $40 billion revenue quarter implied.
Second-order effects
- With China now characterized by GigaOM as Apple's second-most important market, carrier partnerships and channel build-out there become the swing factor for whether the guided record quarter materializes.
- An $81 billion cash pile, two-thirds of it offshore, sharpens the capital-allocation question: the money keeps compounding abroad faster than Apple deploys it, pressuring future decisions on buybacks, dividends, or acquisitions structured around the offshore balance.
Third-order effects
- If the pattern holds, Apple's reported quarters become progressively more a function of the iPhone upgrade cycle and international mix than of U.S. launch-week numbers — raising the stakes of each product transition for suppliers and carriers tied to that cycle.
- The growing offshore share of profits points toward a structural reckoning over how multinationals repatriate earnings, a question that will outlast any single quarter's beat or miss.
The trend: Apple's earnings story is rotating from a U.S.-launch-driven narrative to one set by China demand and an ever-larger offshore cash balance, with each quarterly report judged against both.