Apple last night announced its Q4 2014 earnings results reporting that the company earned $42.1 billion in revenue and $8.5 billion in profit during the quarter. Not a bad start!

Apple’s financial results for its fiscal 2014 fourth quarter ended September 27, 2014. The Company posted quarterly revenue of $42.1 billion and quarterly net profit of $8.5 billion, or $1.42 per diluted share. These results compare to revenue of $37.5 billion and net profit of $7.5 billion, or $1.18 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 37 percent in the year-ago quarter. International sales accounted for 60 percent of the quarter’s revenue.

So far so good.

App Store downloads have now topped 85 billion up from 60 billion around a year ago.

In addition to reporting its earnings, Apple has disclosed sales numbers for its main revenue generators. The company sold:

iPhone: 39.272 million, up 16.2%
iPad: 12.316 million, down 12.5%
Mac: 5.52 million, up 20.7%
iPod: 2.62 million, down 25.1%
iTunes: $4.208 billion, up 8.2%
Accessories: $1.486 billion, up 12.7%

Other headline figures –

Revenue: $42.123 billion, up 12.4%
EPS: $1.42 per share, up 20.3%

Apple CEO Tim Cook had the following to say regarding the results:

“Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,” said Tim Cook, Apple’s CEO. “With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”

Apple CFO Luca Maestri added this:

“Our strong business performance drove EPS growth of 20 percent and a record $13.3 billion in cash flow from operations in the September quarter,” said Luca Maestri, Apple’s CFO. “We continued to execute aggressively against our capital return program, spending over $20 billion in the quarter and bringing cumulative returns to $94 billion.”

Some of the key takeaways of the Q4 earnings –

– Strongest revenue growth rate in last 7 quarters
– Legacy models are helping drive sales due to lower price points
– Apple will class Apple Pay and Apple Watch as new categories. Apple Pay will be in its Services category. iPods will now move into Other Products category.
– Apple ended the quarter with $155.2 billion in cash, down $9.3 billion sequentially
– Retail Store revenue last quarter was $5.1 billion, up 15 percent from a year ago. 10 new stores were opened with 25 more expected in 2015 most of which will be outside of the USA.

So no surprises. iPad and iPod sales are declining. The iPod is dead as Apple clearly aren’t investing in its future. Even the iPad Mini didn’t really receive much of an update last week. Clearly the larger iPhone 6 Plus will be the new Mini. Also I don’t believe the newer iPads will stop the decline. However, they are a few factors which may prevent this happening, that being iPads in business and the new IBM enterprise deal which starts in November 2014. This will be rolling in of the following areas – banking, government, insurance, retail, travel and transportation, and telecommunications. Apparently there is strong demand from the business sector.

Which ever way you cut these figures it was a great set of numbers.

Of course the press will now say Apple is doomed!