Apple Quarterly Results: Mac Sales Way Up, iPods Pretty Flat
No surprise, this quarter was Apple's best March quarter ever. Here are the bits that matter—2.29 million Macs shipped, 51 percent more than same time last year, so Mac sales are booming. iPod sales are actually pretty flat from last year, up a meager one percent—are we at the saturation point? And 1.7 million iPhones, obviously down from a couple a months ago, when it was all Christmas boom, but not bad considering we're at the point where people are going to start waiting for the 3G iPhone. Read the whole thing below, but they still won't comment on their big purchase from last night. We'll be in on the call for more details in about 20 minutes, updating it live.
Even though iPod sales are essentially flat, revenue is up, due to iPod touch (more expensive, and they don't break down sales by iPod type, plus shuffle got cheaper). They're definitely the music industry juggernaut to topple: Apple owns 73 percent of portable music player market and iTunes has 85 percent of market for legally purchased music. No numbers on movie rentals.
Macs' growth was three and a half times the PC growth rate in March. Desktop sales up 37 percent from last year but notebooks are where the money is: portable sales up 61 percent from last year. 50 percent of retail buyers new to Mac.
Still expecting to sell 10 million iPhones by end of the year. Analyst tries loopy-loop endrun question about lower iPhone supply and declining sales to get them to admit new 3G iPhone, Apple replies (repeatedly to not-so-sneaky iPhone questions trying to get 3G hints) they're still confident they can hit 10 million. Interestingly, they're not counting any iPhone revenue from units sold after SDK announcement until 2.0 firmware launches in June—maybe indicates they don't think people will buy iPhone until 3G launches?
Okay famed Gene Munster gets them to have to launch into their own long loopy answer about why they're delaying revenue reporting on iPhone when the 2.0 update is free. Seems obvious it has little to do with software. Follow up, another analyst asks about keeping 2.5G iPhone after 3G iPhone out, gets totally shot down.
CUPERTINO, California—April 23, 2008—Apple® today announced financial results for its fiscal 2008 second quarter ended March 29, 2008. The Company posted revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share. These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter's revenue.[Apple]Apple shipped 2,289,000 Macintosh® computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The Company sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter. Quarterly iPhone™ sales were 1,703,000.
"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."
"We're thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00."
Apple will provide live streaming of its Q2 2008 financial results conference call utilizing QuickTime®, Apple's standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Wednesday, April 23, 2008 at www.apple.com/quicktime/qtv/earningsq208/ and will also be available for replay.
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What's interesting is that every other company's reporting includes long explanations about how "low consumer sentiment and a general slowdown in macroeconomic indicators caused .... zzzzzz .... and that's why our executives just cashed in half of their stock options and the company didn't make any money this quarter."
Apple, on the other hand, says that they're developing not just new products but entire new ecosystems. The 3rd-party products for the iPhone alone may dwarf today's total market for smartphones, because Apple made it work. It's not a clunky tradeoff, they actually innovated.
To hell with quarterly statements, it doesn't take a financial genius to see that the best investment is on companies that concentrate on delivering innovation that actually works. Nice job, Apple.
my favorite car is a motorcycle
love you apple
enfinite5
I have to believe a lot of the Mac sales are coming from Windows developers getting into the iPhone Dev free for all. [www.budcase.com]
cdawson2000
Is this just US or World Wide?
Everybody knows Apple is huge in the US but not soo good apart from ipod sales when it come to world wide
The Full English Please!!
It's only a matter of time until Macs won't be the "cool and exclusive" thing like it is now.. Or maybe people might start making more spyware, viruses, etc.. for it if it has a large enough base?
Katorok
@danz32: I don't get how you're pulling that out. "We" as in the collective "we." Don't see where Apple fits into that.
matt buchanan
@Sleeper_Service: Your right on that. Not only is Apple doing well, but even Google turned their stock around with better than expected quarter returns. The economy right now seems to be totally flat and it hasnt been dipping enough recently to affect companies too much.
imTheKing
"...are we at the saturation point?..."
"...but not bad considering we're at the point where people... "
So you refer to your relationship with Apple as "we"?
danz32
@snitch29:
About the same. Apple sell to people with good disposable incomes who are largely unaffected by any economic slowdown so far.
Sleeper_Service
If they manage to make these #s on a really bad economy imagine how would they do when things get better
snitch29
once again growing.
Bring on the Mac haters and their "its too expensive" gibberish.
imTheKing
As much as there is good to say about their sales and revenue, what I image will be concerning for investors is this little tidbit buried in the press release:
"Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter."
So essentially, for every dollar in revenue Apple brings in, they're having to spend 8% more to cover their overhead. That's concerning for long-term profit margins.
geekpi
hooray! for MY aapl stocks, too.
bought @ 33. back in 2000
tomaartist
@Kaiser-Machead: An I gave Bubba's family his rightful share and now Bubba's momma done hired herself her own maid!
frigg
I'm glad to see the iPod numbers reflecting my initial reaction to this years lineup. Hopefully the engineers are paying attention, and the next refresh will include Bluetooth and the option to enable "Classic" interface on all the non-Touch models. I thought about getting a new Nano when my first gen bit the bullet, but after playing around with the goofy, slow new interface I got a refurbed second gen instead.
Cashak
Nice numbers. Have they given us the split of Mac sales by product yet?
Or, indeed, at all.
Sleeper_Service
@Kaiser-Machead: heh, meet. You damn PETA people have gotten to me.
Kaiser-Machead
@ILikeMacsWhatAboutIT:
Hello Mr. Shtick, I'd like you to meat a good friend of mine, Ms. Ad Nauseam.
Kaiser-Machead
Like I've been saying, they don't know what they're doing. Everyone's figured out that they make terrible, over-priced products.
Bankrupt in 3 years, bet the farm...
ILikeMacsWhatAboutIT
@NewPerfection: Anything over 10% and it's highway robbery!
Kaiser-Machead
Hooray "significant" number of unlocked iPhones sold!
Hiphopopotamus
"Gross margin was 32.9 percent"
And people say Apple way overcharges for its hardware.
NewPerfection
yay for my Apple stock
chopstickhero
@tucker: I think you're probably right. Combined with what I sense is underwhelming sales of the iPod Touch, flat sales sounds about right to me.
weatherman
the disclaimer is longer (and more entertaining) than the actual article.
I'm assuming these numbers are Int'l, and not just US, right?
discounteggroll
@drummerjoe
It's ok. Just buy more tomorrow.
@Hiphopopotamus
Their projections are ALWAYS under consensus. I've been following AAPL for the past 2 years and I have never heard Apple project above consensus estimates.
_badtziscool
@drummerjoe: it investors are reacting to future speculation: [www.reuters.com]
Paradise
And so I got this letter in the mail, sayin' that I bought shares for this fruit comp'ny. Since I'll be gettin' a go-jillion dollars, I won't have to worry about money anymore, an' I said Good, one less thing ta worry about.
Kaiser-Machead
@Hiphopopotamus: Though they always lowball their expectations... they said 97 cents for this quarter and did $1.16
Hiphopopotamus
@drummerjoe: Their projections for Q3 are 10% below current consensus estimates.
Hiphopopotamus
Best March quarter ever, and beating most of analysts expectations, yet the stock is down $2 in after-market trading. wtf.
drummerjoe
you have to figure iPhone sales eat into iPod sales, so if you combine the two, iPod sales would be up 17%.
tucker
"... strong momentum to launch some terrific new products in the coming quarters."
Waiting w/ impatiently for terrific new products.
rexplex