Another Apple earnings call, another blowout quarter. The consistency of stellar results is staggering. It’s to the point where if the results are merely good the stock will tank in after hours. The expectation of excellence is firmly ingrained in The Street.
(Where are the morons who told me to sell at $120 now? You think this is a fundamental analysis stock? That stuff is dead. Get on the train or miss the ride altogether.)
Let’s Start With the Basics
Apple announced that its third quarter profits jumped 73% to 818 million, or $0.92 PDS, on sales of $5.41 billion. These results compare to revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 PDS, for the same quarter last year. Gross margin was 36.9 percent, up from 30.3 percent in the year-ago quarter. International sales accounted for 40% of the quarter’s revenue.
So, profits ridiculously up, sales up, EPS up. All lights blindingly green.
So Much for the Notion That the iPhone is Killing the Mac
Not happening. Like, at all.
Apple saw Mac shipments spike 33% versus the year-ago quarter and shatter the previous company record for Mac shipments by some 150K units. Apple also sold 9.815 million iPods during the quarter, which boils down to 21% growth.
Having Mac results like this is pretty impressive considering this quarter’s Mac highlights consisted of:
- Leopard delayed because all of the OSX aces went to the iPhone team.
- Hey, Safari for Windows. Excuse me while I don’t care one bit.
- AppleTV is a hobby, yo.
- Transparent menu bar, f’real.
So yes, the Mac is dying, Apple will partner with MS and make its own flavor of Vista, blah blah blah. Shut up.
I Seem to Remember Hearing Something About Some iPod Music Phone Thing
Apple sold 270K iPhones in the final 30 hours of its fiscal third quarter — the debut hours. Once June ended, button everything up, because that’s all that’s being reported.
Contrary to what I’ve read on some other blogs by special-ed kids, this is not the overall iPhone unit sales number. Next quarter’s results will pick up where this one left off.
Given Apple’s stated plan to defer iPhone accounting and revenues over a 24 month period, Apple said sales of the first 270,000 iPhone contributed only $5 million in revenue to its quarterly total.
What Am I Saying?
What else is there? Just another fantastic performance by what might be the best management team in technology. Does this make me a fanboy? Do I see the world through Apple-goggles? Let me put it this way: whether you love or hate or are just indifferent to Apple, if you chose not to recognize the financial performance that’s going on, quarter-after-quarter, then you’re a moron. What we have here is a company at the top of its game, a stock that has a huge emotional/speculative bias towards it and a management team that knows how to trickle the PR/news out just right to keep the engine humming on all twelve.
If I were going to buy my son 10 shares of any stock that he’ll hold until he’s 18, Apple would be on the short list. It might be the short list.
12 responses so far ↓
Chuck // July 25, 2007 at 10:49 pm
“Let me put it this way: whether you love or hate or are just indifferent to Apple, if you chose not to recognize the financial performance that’s going on, quarter-after-quarter, then you’re a moron. ”
Best quote I have read yet since the earnings report!
You nailed it on the head. The people who think it’s just the Apple fanbois who are driving this are now just stupid. Apple is a well oiled profit MACHINE. No one can deny it. If you hate the Mac, the iPod and the iPhone, fine. But you can’t deny that Steve Jobs knows how to run a technology company.
Great post. Thanks.
Tom // July 25, 2007 at 10:50 pm
Spot on analysis.
But don’t forget iPod sales. To sell 9.81M units when there’s been no refresh in nine months (really, almost two years for the high-end model) and it was getting no buzz due to the iPhone is simply amzing.
Apple supporters tend to take iPod sales for granted, but I considered this quarter’s results amazing, even though down a bit from the last quarter.
John // July 25, 2007 at 11:41 pm
Spot on and well said. Apple is like an elite athlete. Hard working, fine tuned and a pleasure to watch in action, on both the product and the corporate execution level. An elegant stud.
beanie // July 26, 2007 at 2:46 am
Aw come oh. Everyone knows the stock was being pumped up because of the iPhone hype.
iPhone sales were disappointing if you go by the over the top numbers the “analyst” throwing around, like those from Pied Piper. Most “analyst” raised the stock target because of the off the wall iPhone predictions, not because of Mac and iPod. Everyone expected Mac and iPod numbers to be met. So those were no big deal.
Some were saying 500,000-700,000 iPhone sold in the last two days of the 3rd quarter. Some were saying AT&T activated 1 million a few days after the iPhone release. Some predicting 10 million- 14 million by end of the 2007 year. Come on, not even close.
Apple gives some guidance on iPhone sales instead of “analyst/stock pushers” coming up with ridiculous numbers. Apple hopes to sell 1 million in 4th quarter and 10 million in 2008. Well, that pretty much what Apple has been saying all along.
All I can say is that the Mac and iPod saved the butts of the out of control “analysts” predicting tremendous iPhone sales and raising their stock target because of it. Are the “analyst” still standing by their iPhone predictions? Anyway good earnings.
Jeff, mutual fund is probably safer than owning some Apple stock. In 15 years, Linux Kernel will rule computing devices.
beanie // July 26, 2007 at 3:04 am
Jeff said,
“Safari for Windows. Excuse me while I don’t care one bit.”
Did you know that Google pays for the searches launched from the toolbar? They must be making making millions already with 5% Mac browser market. So theoretically, they could make even more millions from the Windows version. But Safari for Windows seems to be a flop.
(First) Quote Of The Day: GracefulFlavor « Mike Cane’s Blog // July 26, 2007 at 11:32 am
[...] Quote Of The Day: GracefulFlavor AAPL en fuego. What else is there? Just another fantastic performance by what might be the best management team [...]
Khurt // July 26, 2007 at 12:17 pm
I am so glad I “held”.
AchAchAch // July 26, 2007 at 12:47 pm
Seriously, steal more content.
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Bill // July 26, 2007 at 5:53 pm
I wonder how many were sold since the offered. Many waited for the crowds to end, then most stores sold out, restocked and sold out again. This is not included in the 270,000 in the first weekend. Next is Canada then Europe or Asia. They are going to sell a few boat loads. I really want to wait for more features, so I guess gen/rev 2 is in my future.
Does any one know if you can save word and Excel documents and display them?
As noted at CNET, test companies are utilized for ActiveSync testing.
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