Apple Ends Fiscal Year With Revenue Jump but Profit Fall

Apple banked a net profit of $7.5 billion on $37.5 billion in revenue during the last quarter leading into the all important holiday season. The Cupertino giant sold 33.8 million iPhones, 14.1 million iPads and 4.6 million Macs during the quarter.  Profits dropped nearly 9 percent from last year’s comparable period while revenues jumped 4 percent.

iPhone sales increased 26 percent while iPad sales were essentially flat year-over-year. Mac sales also declined 6 percent from the year-ago quarter.

Apple is closing another calendar year without launching a new product category such as the long-rumored TV and smartwatch. But it enters the busy shopping season with two new iPhones, a completely refreshed lineup of iPads and new operating systems for Macs and iOS.

Earlier this month the company announced it sold 9 million iPhones during the first weekend of iPhone 5S availability, making it once again the biggest iPhone launch to date. Apple also sold its 170 millionth iPad earlier this month, while the new iPad Air and iPad mini with retina display hit stores in November.

During the earnings call with analysts, chief executive Tim Cook reiterated plans to introduce products in new categories across 2014.

“If you look at the skills that Apple has from hardware, software and services and at incredible app ecosystems, these set of things are very, very unique,” he says. “I think no one has a set of skills like us and we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. So we’re pretty confident about that.”

New products aside, Apple is increasingly driven by software, services, and iPhone and iPad sales. Customers purchased 150 million iPhones, 71 million iPads and 16 million Macs during the company’s recently-closed fiscal year, according to Cook.

“We expanded the breadth and depth of our ecosystem and we generated over $16 billion revenue from iTunes software and services. We also welcomed almost 400 million visitors to our retail stores and opened or remodeled 49 new stores and for the second year in a row we produced over $50 million in revenue per store,” he tells analysts.

“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 as I’ve said many times, but we’re focused on usage share and customer loyalty and other things that are very important to us,” Cook adds. “We believe these products are going to do really well. We think it’s going to be an iPad Christmas.”

Apple ended the quarter with $146.8 billion in cash, 76 percent of which is offshore, and completed 15 acquisitions during the course of the quarter.