Apple has revealed its Q1 2013 financial results today, reporting of a record breaking $13.1 billion in profit on $54.5 billion in revenue - compared to Apple's earnings of $13.06 billion in profit on $46.33 billion in revenue from last year's quarter. The company sold 47.8 million iPhones compared to 37 million last year, and 29.9 million iPads compared to 15.43 million sold last year. Tim Cook blames supply constrains of its new thin iMacs for reporting poor Mac sales this quarter of 4.1 million, compared to 5.2 million Macs it sold last year.

We’re thrilled with record revenue of over $54 billion and sales of over 75 million iOS devices in a single quarter,” said Tim Cook, Apple’s CEO. “We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.

Cook stated that Apple is working on numerous new and exciting products in the pipeline. When asked about an Apple-made HD TV, Cook once again shared that it remains an area of intense interest for Apple.

That said, investors aren't happy about Apple's financial results as AAPL stock plummets well below $470 in after-hour trading. Tim Cook and Peter Oppenheimer have answered questions asked by analysts in today's earnings call. More after the break.

Q: iPhone 5 did incredibly well in the U.S., but internationally data has been more mixed. How would you characterize trends outside the U.S. for iPhone? Do you feel you have right screen sizes and price points to capture demand?

A: Sequentially we increased over 70% from September quarter, 3.5x market. We could not be happier with that. In terms of geographic distribution, we saw our highest growth in China. It was into the triple digits which was higher than the market there. I would characterize it as "we're extremely pleased."

Q: With such a large cash generation this quarter and stock price off its highs, why not step up and buy back even more stock than you had originally planned?

A: We continually assess this. We are pleased to have started our share repurchase program this quarter. Combined with the dividend, we returned $4.5b in cash this quarter. Expect to return $45 billion to our shareholders over the next 3 years.

Q: Many of your competitors are differentiating themselves with larger screen sizes. How do you feel about the market in that respect? Is there a long term case for larger screen sizes for smartphones?

A: iPhone 5 offers a new 4" retina display. The most advanced display in the industry. No one comes close to matching the level of quality as our retina display. It also provides a larger screen size without sacrificing one-handed ease of use. We believe we've picked the right screen size.

Q: Can you give us some color regarding iPhone demand trends coming out of the quarter?

A: If you look at iPhone sales across the quarter, we were constrained for much of the quarter on iPhone 5. As we begin to ship more, sales went up with production. iPhone 4 was in constraint for the whole quarter and sales remained strong.

Months of rumors about order cuts and so forth, so let me take a moment to comment on these. No comment on any particular rumor as I'd spend my life doing that. I suggest its good to question the accuracy of any kind of rumor about build plans. Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on.

Q: When you provided guidance before, was it uniquely conservative? Is it no longer conservative? Are we getting a real planning range that's fundamentally different from before?

A: In the past we provided a single conservative point estimate that we were confident of achieving. Our new guidance provides a range that we believe we will report within. No guidance is guaranteed.

Q: You think you'll report in the range -- was the guidance before something you felt reasonably confident in achieving? Historically you eclipsed your estimates enormously. Now you say you'll land in the range.

A: In the past we gave a single point of conservative guidance. We were reasonably confident we would achieve it. We now provide a range of guidance that we expect to report within.

Q: Tim, you started the call talking about Apple's philosophy of ensuring that you satisfy your customers and make great products. Into that backdrop, how important is market share preservation? Is holding share in the smartphone market in 2013 a priority for Apple? Yes or no and why?

A: The most important thing to Apple is to make the best products in the world. We aren't interested in revenue for revenue's sake. We could put the Apple brand on a lot of things and sell a lot more stuff. We only want to make the best products. We've been able to build market share and have a great track record with iPod of doing different products at different price points. I wouldn't view those as mutually exclusive as some might. We're focused on making great products that enrich lives.

Q: Talk a little more about Macs? Shortfall there is $1 to $1.5 billion. How much of that is pushed into March quarter?

A: Thanks for asking the question. The best way to answer this is to look at the previous year. The difference is $1.1 billion from last year. iMacs were down by 700k units year over year. As you remember, we announced new iMacs late in October. Announced they would ship in November and December. Did ship by those dates. Limited weeks of ramping on those products during the quarter. Significant constraints on the iMac at the end of the quarter. Sales would have been materially higher without those constraints. Tried to share this on the conference call in October.

If you look at last year, we had 14 weeks in the quarter last year. 13 weeks this year. Channel inventory was down from the beginning of the quarter by more than 100k units. Didn't have the iMacs in channel. These factors bridge more than the difference between this year's sales and last year's.

These are lesser things: the market for PC's is weak. IDC estimate is -6%. We sold 23 million iPads, could have sold more than this because we were constrained on iPad mini. Some cannibalization there, sure there was some there. Mostly was iMacs, 13 versus 14 week, channel inventory more than explains difference from last year to this year.

Our portables alone were in line with IDC projections of market growth.

Q: Lot of publicity around Maps, can we have an update? How does year look in terms of innovation and iOS 7 and your online and web services? How will that drive Apple?

A: We're working on some incredible stuff. The pipeline is chock full. We feel great about what we've got in store.

In terms of Maps, we've made a number of improvements since the introduction of iOS 6. Roll out even more improvements throughout the rest of the year. Going to keep working on this until it lives up to our standards. Include improved satellite imagery, improved local information and so forth. Usage of Maps is significantly higher than prior to iOS 6.

Feel fantastic as to how we're doing. 4 trillion notifications through notification center. 450 billion iMessages, 2 billion per day. 200 million registered game center users. 40 billion App Store downloads. More stuff we can do and we're thinking about all of it.

Q: Gross margin in the quarter? Looking ahead, comment on a few areas on -- where on your product cost curve? What about iPhone mix? iPad of mini to regular?

A: iPad mini, it's hard to know. Couldn't make enough. Constrained every week. Customers love the mini and we wish we could have made more. Significant backlog at end of the quarter.

Gross margin, we were 260 basis pts ahead of our guidance. Half from lower product and transitory costs. Rest came from higher mix of iPhones, weaker dollar and leverage on higher revenue. Gross margin will be 10 to 110 basis points lower sequentially. Teams have made meaningful progress in product and transitory costs, and will benefit from that. Typical level of deferred revenue from device sales going forward. Will be offset by loss of leverage coming out of December quarter, and different mix of current products. Regarding mix, we'll have lower gross margin on iPad mini that is significantly lower than corporate average.

ASP on iPhones was essentially the same YoY. Underneath that, if you look at the mix of iPhone 5 versus total iPhone, versus iPhone 4S the prior year, those mixes were similar. For capacity, we saw similar results in Q1 as we saw in Q1 of the prior year.

Q: You spent almost as much as Intel did on CapEx. You said you weren't gonna become integrated, but you're presumably buying equipment for partners. What does this do for strategy? How deep will you go on semiconductor and componentry?

A: $10 billion in CapEx this fiscal year, up $2 billion year over year. A billion in retail stores, plus equipment we will own that we put in partner facilities. Our primary motivation there is for supply. Adding to data center capabilities, as well as infrastructure.

Q: What happened last year in terms of refresh cycle? You say you ship products when they're ready, but are you going to stagger them out this year or will it be a similar situation to 2012?

A: 80% was unusually high percentage for us last year. The number of ramps were unprecedented in that we had new products in every category which we haven't done before. We feel great to have delivered so many great products for the holidays and our customers have expressed joy over it.

Q: What are you hearing on China from customers and partners? What do you expect going forward?

A: If you include retail stores in China, our revenues were $7.3 billion on he quarter. Up over 60% year over year. Comparing 13 to 14 weeks, underlying growth is higher than that. Exceptional growth in iPhones into triple digits, iPad was shipped very late in the quarter and despite that saw very nice growth. Expanding in Apple Retail there. Year ago, we had 6 stores -- now have 11. Have many more to open. In our premium resellers, we went over 400 in the region, up from 200 in the previous year. 7k to 17k in iPhone point of sale. Not nearly what we need and not the final by any means. Making great progress.

It's clear that China is our second largest region and there is a lot of potential there.

Q: You've said the Apple TV experience was dated. Can you step outside the form factor and talk about how important this market is to Apple? Can you accomplish what you want to accomplish with the reality of where content is distributed today?

A: You're asking lots of questions I won't answer. In terms of products we sell today, we sold more last quarter than we've sold before. Eclipsed 2 million during the quarter. Up 60% year over year. Very good growth in that product. What was a small niche at one time is now a much larger number.

This is an area of intense interest for us and remains that. I tend to believe that there is a lot we can contribute in this space and we continue to pull the string and see where it leads us. Don't want to be more specific.

Q: Didn't give EPS guidance -- is there any parts to EPS and gross margin that you want to address?

A: Gave a line item on each estimate across the P&L -- for the future, we'll give a range for revenue, gross margin and OpEx. There are many possibilities for EPS across the range for you to figure out. We will report our actual results in April.

Q: How did iPhone 5 sales proceed in terms of new customers versus upgrades and how does that compare to the 4S last year?

A: Don't have specifics, but iPhone 5 volume shows that we're selling to a lot of new customers.

Q: We heard that it was a lot of upgrades to existing customers but it doesn't sound like you'd agree with that.

A: Don't use what you heard as a proxy for the world. Many carriers are created differently.

Q: Confused as how to think about iPads for March quarter. iPad mini was constrained, any comments on seasonality? How are you thinking about aggregate inventory in the channel? Will that be going up or down in March quarter?

A: iPad mini was very constrained -- ended underneath our target channel range. We believe we can achieve supply/demand balance later this quarter. That would likely mean that we would need more units in the channel than we have today. That's a fair conclusion to draw.

For total iPad sales, we don't provide a sub level forecast. We would expect a large year over year increase in holiday sales, but a drop sequentially. We expect to meet demand for the mini.

Worth pointing out that for last quarter, we had strong sales of iPad and iPad mini.

Q: Discuss the tablet market a little bit? And also constraints going forward? Where do you see challenges in meeting demand?

A: Overall, our team did a fantastic job ramping a record number of new products. Significant shortages due to robust demand on iPad mini and both iMacs that persisted across the quarter. Short on both products today. Supply of iPhone 5 was short to demand until late in the quarter. iPhone 4 was short for entire quarter. Can achieve supply demand balance of mini and iPhone 4 this quarter. Significantly increase supply on iMac this quarter, but not sure if we can achieve balance this quarter.

Cannibilization is a huge opportunity for us. We never fear it because if we do, someone else will do it. iPhone has cannibalized iPod, that doesn't worry us. iPad has on the Mac, and that doesn't concern us. For iPad, Windows market is much larger than Mac market. Tremendous amount of opportunity there for us. I believe the tablet market will be larger than the PC market at some point. You can see by the growth in tablets and pressure on PC's that those lines are beginning to converge.

The other thing for us, maybe not for others, if somebody buys an iPad mini and its' their first Apple product, we have great experience through the years — if someone buys their first Apple product, these people buy another Apple product.

It's the halo effect, as we termed it, that we saw with the iPod and the Mac — we've seen some of that with the iPad as well.

I see it as a huge opportunity.