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Apple 'happy ending': BULGING iPhone WAD - but can it ever be enough?

'A strong finish to an amazing year' beams the Cookster

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Apple has reported its financial results for the fourth quarter of its fiscal 2013: its numbers handily outperformed the projections published by the Wall Street moneymen, though net income slipped from the same period last year.

For the quarter, Apple's all-important earnings per share (EPS) came in at $8.26 on revenues of $37.5bn. Apple's numbers for the same quarter last year were an EPS of $8.67 on revenues of $35.97bn. Net income for the quarter totaled $7.5 billion, compared to $8.2 billion for the same period last year.

Consensus Wall Street estimates compiled by FactSet for Q4 2013 put EPS at $7.92 and revenues at $36.87bn, while the average estimates of the 47 analysts surveyed by Yahoo! Finance were a penny more optimistic for EPS at $7.93 and $30m more downbeat for revenue at $36.84bn. The range of Yahoo! Finance's EPS numbers was $7.23 to $8.49, with revenue projections from $34.57bn to $39.18bn.

"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 a statement.

The quarter that was detailed after the markets closed on Monday ended on September 28, and so included only about a week of sales of Apple's "forward-thinking" iPhone 5s and "unapologetically plastic" 5c, which were announced on September 10 and went on sale on September 20. Apple reported that it had sold 33.8 million total iPhones in the quarter, a new record for their fourth fiscal quarter; word on the street was that sales would be as low as 32 million or as high as 36 million.

Apple also sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter, along with 4.6 million Macs, compared to 4.9 million the same quarter last year.

The new iPad Air, iPad mini with Retina display, MacBook Pros, and Mac Pro haven't hit store shelves yet, and so their sales weren't part Apple's Q4 2013 numbers – unless, of course, you factor in the fact that their impending releases may have depressed sales of the models they're about to replace.

After reporting that it had sold nine million of the new iPhones in their first weekend of sales – but not breaking down the sales by model – Apple made the unusual move of upping its revenue estimates for the just-finished quarter to the high end of the range it had forecast when it announced its results for the previous quarter.

"Apple expects total company revenue for the fourth fiscal quarter to be near the high end of the previously provided range of $34 billion to $37 billion," CFO Peter Oppenheimer wrote in an SEC filing on September 23. As seen in their projected numbers, above, the Wall Street moneymen took Oppenheimer at his word.

Those same fiscal prognosticators are already hard at work putting out their numbers for Apple's current holiday-shopping quarter, and they're decidedly more optimistic than they were for the just-completed quarter. FactSet's folks project an EPS of $13.92 on revenues of $55.5bn, and Yahoo! Finance's analysts' wild guesses considered opinions average out to an EPS of $13.86 on revenues of $55.65bn.

Both of those are up from the same quarter last year, when Apple's EPS was $13.81 on revenues of $54.51bn. However, if the word on the street is correct that shipments of the iPad mini with Retina display will be seriously constrained due to supply problems with its 7.9-inch, 2048-by-1536 pixel display, Wall Street's optimism about the current quarter may be tempered by the time Apple announces its Q1 2014 numbers in late January of next year.

Apple, however, remains optimistic about the holiday quarter, projecting revenues between $55bn and $58bn. Wall Street, however, seems a bit less optimistic: shares of Apple stock, which had risen to as high as $531 during the day – some of the recent rise likely due to activist investor Carl Icahn's share-buyback pushiness – dropped to just over $500 immediately after Apple issued its Q4 2013 report, but quickly bounced back, though only to around $520. ®

The smart choice: opportunity from uncertainty

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