October 18, 2006 1:49 PM PDT
Apple results beat the Street
Last modified: October 18, 2006 2:20 PM PDT
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Buoyed by greater than 30 percent growth in both Mac and iPod sales, the company said it earned $546 million in net quarterly profit, or 62 cents per share, on revenue of $4.84 billion, for the three months ended Sept. 30. That compares to profit of $430 million, or 50 cents per share, on revenue of $3.68 billion for the same quarter a year earlier.
Apple had been expected to report revenue of about $4.7 billion and per-share earnings of 51 cents, according to Thomson First Call.
Shares of Apple surged following the announcement, changing hands recently at $79, up 6 percent. Ahead of the earnings report, Apple shares inched up 24 cents, to $74.53."This strong quarter caps an extraordinary year for Apple," Apple CEO Steve Jobs said in a statement. "Looking forward, 2007 is likely to be one of the most exciting new product years in Apple's history."
However, the company offered an outlook for the current quarter that was below what many analysts were projecting. The company said to expect per-share earnings of between 70 cents and 73 cents on revenue of $6 billion to $6.2 billion. Analysts were expecting per-share earnings of 77 cents and revenue of $6.45 billion, according to Thomson First Call.
Apple's financial picture also continues to be clouded by the company's inquiry into stock option dating. Apple cautioned in its release that its "preliminary results may be subject to significant adjustment as a result of a likely restatement of historical results."
Earlier this month, former chief financial officer Fred Anderson resigned as an Apple board member as the company disclosed more details about its investigation of potential backdating of stock options. Apple said that Jobs was aware, in a few instances, that favorable grant dates had been selected. "But he did not receive or otherwise benefit from these grants and was unaware of the accounting implications," the company said in a statement.
Apple said back in June that an internal probe had "discovered irregularities" related to the issuance of stock option grants.
Dozens of companies have launched probes of their accounting practices regarding stock options, and the SEC and federal prosecutors are also looking into the matter. CNET Networks, the publisher of CNET News.com, last week said that an investigation found that, in some instances, the company backdated options. CNET chief executive Shelby Bonnie and two other executives resigned last week.
For the September quarter, Apple said it sold 8.7 million iPods, up 35 percent from a year ago, and 1.61 million Macs, up 30 percent from the same quarter a year ago. The company saw a 4 percent year-over-year increase in desktops, but notebook sales jumped 56 percent as the company got the benefit of its first full quarter of MacBook shipments.
Sales of music-related products and services other than the iPod, including the iTunes store, totaled $452 million. That's up 71 percent from a year earlier, but down 1 percent from the prior quarter. Peripherals and other hardware sales were $297 million, roughly unchanged from a year ago, but up 26 percent compared to the prior quarter. Software, service and Other sales amounted to $316 million, up 7 percent from a year ago and 1 percent from the previous quarter.
Apple's retail stores generated $936 million in revenue, up 41 percent from a year ago and 31 percent from the prior quarter.
Apple shipped 975,000 Macs in the U.S. during the September quarter, according to IDC, putting the company within a stone's throw of nabbing the No. 3 spot from Gateway. IDC analyst Richard Shim said that Apple's market share gains could be only the tip of the iceberg, given that the company has a new operating system coming out next year and it has now moved its entire product line to Intel chips.
"We're kind of getting beyond this notion of a halo effect (from) the iPod," Shim said. "The Mac business can not only stand on its own, but it can start running."
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they will sell record volumes of product during the upcoming
holiday period, too.
Why did I listen to Michael Dells' dire predictions about Apple? I
should have followed my instincts a few years ago and purchased
stock. The value has more than tripled since then.
climb further if you focus on making quality products and
strengthen the support for its product. And the Pro Care is a
slap in the face to people who expect the pro care quality service
at the first place. I believe that if they are going to implement
pro care, they should just include it in AppleCare. I personally
am already looking at alternative to a Mac. My current macbook
is my third mac now. I am pretty disappointed with the quality
and the slow turn around fix service at Apple store. The slip in
quality is definitely hurting its new customers and giving new
switcher a bad after taste. I seriously hope they apply some sort
of Quality control when they do introduce new phones. Because
not spending money on it will haunt them in the near future. If i
can find a good Linux/Windows combination. I am going to
switch right away.
installed base of Microsoft Windows machines in corporate
environments is enough to sustain the company for a long time to
come. The fact that OS X is superior to MS Windows is not going to
change the personal computer landscape in a significant way
anytime soon.
If the Macbook Pro is superior in quality and performance, fantastic, but I shouldn't have to pay twice-the-price of a MacBook or 3x the price of the average PC to get a quality product. I shouldn't have to buy a Lexus when all I need is a Corolla.
I'm glad to see Apple doing well, but I would like to see them focus more on QA/QC instead of profits and new products. If that were the case, their support page wouldn't be full of repair extention programs (iBook G3s, eMacs, iMacs, iMac G5s, etc.). My buddy had an iBook G3 and after 6 logic board replacements in 2 years, he finally threw the thing away and bought a "Dell" (not my first choice). A year later, he's writing his Master's thesis on the Dell.
Anyone who says, "Oh, that's just one machine..." or "You're off topic.." or even "Mine is doing fine..", well, great, that's your opinion and you're certainly entitled to it. However, just as you claim the issue or issues are isolated solely to myself and a select group of others, doesn't mean it doesn't exist or their problems are any less genuine. You should show solidarity instead of resentment or accusation.
Telling people their problems are not realistic, genuine, or irrelevant is a sure-fire way to lose the argument you are trying to make.