ive-never-been-more-bullish-for-innovation-at-apple-tim-cook-said-of-the-companys-forthcoming

Following Apple’s announcement of its Q2 2013 earnings and new cash program, the company is hosting an earnings call to discuss the results. The company’s CEO and CFO, Tim Cook and Peter Oppenheimer, also typically stick around for a question and answer session. We’ll be live blogging the proceedings after the break (Image via AP):

- Starting soon…

- Cook, Oppenheimer have prepared statements. Gary Wipler (treasurer) joining for Q/A.

- Cook speaking about first half of the fiscal year. “Very, very large numbers.”

- Tim Cook acknowledges that margins and growth down and Apple is not meeting the expectations of some. Cook says that 2012 was a big year for the company, so not fair to make comparisons.

- Cook also talking about share price falling, he says that only thing in Apple’s control is focusing on product development. Apple is very confident in its future.

- Cook talks future new product categories, giving stats about future growth for the smartphone and tablets.

- Cook says exciting new products this fall and throughout 2014. Cook also saying a lot more “surprises” in the works.

- Cook discussing that it is disciplined, Apple will not under invest. Additionally, Cook says they are investing in infrastructure, acquisitions, production, and more.

- Oppenheimer goes over stats from press releases

- Oppenheimer talking about JD Power awards, iOS app corporate distribution.

-iPhone sales in greater China and Japan sales doubled y-o-y

-Significantly more iPad minis in March quarter than at launch

-Oppenheimer talking about increasing number of corporations issuing iPads to customers and employees

-Oppenheimer says strong y-o-y growth for Macs, iPod touch accounts for half of all iPods sold in March

-iPod continues to be the top selling MP3 player in most countries

-Oppenheimer says Sunday marks the 10th anniversary of the iTunes store

-Record quarterly revenue for iTunes of 2.4B

-More than 850,000 iOS apps, 350,000 for iPad

-74% of all app sales worldwide

-$9B paid out to developers, $4.5B in last four quaters

-Oppenheimer cites recent studies, says 97% of mobile malware from Android, remainder on Symbian and Java

-800 apps downloaded per second

-iCloud hits 300 million daily users, will continue to invest with new features and capabilities

-402 stores, 151 outside the US

-Will open 30 new stores in 2013, 20 store remodels

-average revenue per store was 13.1 million

-91 million visitors compared to 85 million in the year ago quarter

-$102 billion of $145 cash off shore

-Oppenheimer talking new share repurchase authorization, largest share buyback program of any company in history

-Increasing quarterly dividend by 15%, will review dividend quarterly

-”very proud” Apple among the largest dividend payer with $11B annually

-Program will result in returning an average of $30B annually to shareholders

Q/A:

-Q: Rank biggest factors in margin drops. A: Oppenheimer saying March margins in the low end of range. More iPads sold than planned, iPad mini into 4-6 week channel inventory range, policy changes, unfavorable adjustments. Looking forward to June, factors include loss of leverage on lower revenue, different product mix. Could be offset by better products in the quarter.

Q: China growth slowed, is Apple hitting a wall? A: Cook says Apple actually had best quarter ever in China. iPads grew 138% in China YOY. Sell through records for iPhone and iPad. Greater China revenue up approximately 18% (“a bit better than it first looks”). Cook says Apple expects to double its 11 stores in China in less than two years. 19,000 indirect point of sales places for iPhone. Apple adding new features for China’s Apple Online Store. Cook sees big first-time-buyer market for iPhone sales in China in the future.

Q: Comment on competitive landscape in ’13 versus ’12. A: Tim Cook says smartphone market has always been competitive, competitor names have changed. Cook says RIM was strongest player, today Samsung/Google OS are Apple’s toughest competitors. Cook still feels Apple has best products by far and Apple is continuing to invest in innovative products. In hardware, software, and services. Best ecosystem. Apple is going to keep making its ecosystem better and better. Cook feels “very good about competitive position.”

Q: Will there really not be products until Fall? A: Tim Cook says he does not want to be more specific. Cook was saying Apple has great products in the fall and all across 2014.

Q: Gross margins… comment on decline in iPhone ASPs. A: Mixes between iPhone 4, iPhone 4S, iPhone 5 contributed to this. Cook adds, as you get further from a new product launch, there is generally a lower mix of product from when it starts.

Q: Comment on gross margins beyond next quarter… long term. A: Oppenheimer says long-term practice is to not discuss guidance more long term than the following quarter. People all over the world want great products, Oppenheimer says. He also says Apple has been making good decisions. Apple is managed with a very long-term horizon.

Q: Reaction to 5-inch phone market, have Cook’s views on this market changed? A: Cook’s view is iPhone 5 has absolute best display in the industry. Cook says Apple strives to create the best displays. He says some customers value size, while others value portability, app compatibility, resolution, clarity, colors etc. Cook says Apple would  not ship a larger screened iPhone while these tradeoffs exist.

Q: Gene Munster asking about new categories. A: Cook/Oppenheimer avoiding specifics. Cook talking about great software/hardware integration. Advantages from a customer experience point of view.

Q: Comment on Macs? A: Largest decline in PC demand. Apple innovating in the Mac space with Retina MacBook Pro, thin and light.

Q: Experience on lots of new products in Q1 2013. A: Cook would have announced iMac after the turn of the year. iPad mini announcement timing was fine.

CALL OVER.