Apple Posts Q2 Earnings, Posts US$770 Million Profit

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Date: Wednesday, April 25th, 2007, 16:18
Category: News

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On Wednesday, Apple Inc. released its second quarter figures.
According to the Wall Street Journal, a group of Apple board members issued a statement defending Mr. Jobs from accusations tied to the company’s stock-options backdating. The directors said they have “complete confidence” in Mr. Jobs’s “integrity and his ability to lead Apple.” The company stated that it is satisfied with the results of both its own internal investigation as well as the Security and Exchange Commission’s investigation and the board expressed confidence in Jobs’ leadership.
Significant points of the conference call were as follows:
-Apple saw US$5.26 billion in quarterly revenue, up 21.62% over the second quarter of 2006. The company posted a profit of US$770 million, up 88% from the second quarter of 2006.
-The company posted 1,517,000 million Macs and 10,549,000 iPods sold.
-MacBooks accounted for 59% of Macs sold while music products and services accounted for 44% of revenue with the iPod Shuffle proving extremely popular.
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fruitlogo1.jpg
On Wednesday, Apple Inc. released its second quarter figures.
According to the Wall Street Journal, a group of Apple board members issued a statement defending Mr. Jobs from accusations tied to the company’s stock-options backdating. The directors said they have “complete confidence” in Mr. Jobs’s “integrity and his ability to lead Apple.” The company stated that it is satisfied with the results of both its own internal investigation as well as the Security and Exchange Commission’s investigation and the board expressed confidence in Jobs’ leadership.
Significant points of the conference call were as follows:
-Apple saw US$5.26 billion in quarterly revenue, up 21.62% over the second quarter of 2006. The company posted a profit of US$770 million, up 88% from the second quarter of 2006.
-The company posted 1,517,000 million Macs and 10,549,000 iPods sold.
-MacBooks accounted for 59% of Macs sold while music products and services accounted for 44% of revenue with the iPod Shuffle proving extremely popular.
-Other music revenue grew by 35% over last year, mostly fueled by sales from the iTunes Store.
-Apple saw US$855 million in revenues from the Apple Store chain, which opened seven new stores to bring its total number to over 170. There are currently 21 stores outside the United Stated and Apple will open locations in Sydney and Glasgow as well as a third store in Manhattan’s meat packing district at the corner of 13th street and 9th avenue.
-More than 21 million visitors came to the Apple Store in the second quarter.
-Apple strongly hinted that the iPhone is slated for a late June release.
-Apple stated that new features and applications will be critical to iPhone customers and be periodically provided at no cost over time. Apple TV users will see new enhancements and features at no costs as well.
-Apple feels its current staffing level for Mac OS X 10.5 “Leopard” is sufficient, “taking us a little more resource than we thought and we made a choice and delayed Leopard.”
-Apple can’t comment beyond the fact that it will recognize payments from AT&T and Cingular, no specifics can be released as of now.
-Memory component prices have declined and a favorable commodity environment was repeatedly cited.
-The company confirmed that one million people had signed up to receive notice about the iPhone on its web site.
-March quarter was ended with US$12.6 billion in cash. Cash remains on hand and flexible. Share buyback and other actions are occassionally discussed.
-The company is currently not taking pre-orders for iPhone but will announce later when these will be accepted.
-Apple staff is currently “putting a lot of energy in getting ready for the launch.” Hopefully, this will translate into a ready staff that can answer questions on its release day.
-Apple will hold some “unique merchandising” deals in the partnership between Apple and Best Buy in the 200-odd pilot program stores.
-Revenue will be down slightly in Q3 due to market seasonality in iPod availability; the beginning of the education buying season will see a spike in less expensive models being sold. The June quarter isn’t as strong from a consumer perspective.
-No word as to whether the economics of the iTunes Store will change with DRM-free music present.
-The Mac market is growing rapidly, grew at 89% in Asia year over year when IDC predicted about a 16% growth rate. Over 3x the market growth rate quarter over quarter in the U.S. and Europe.
-The iPhone will be sold through Apple and Cingular stores and web sites.
-Japan remains a “very challenging market” for Apple. In terms of the iPod and MP3 market, Apple has maintained an over 50% share and since the market isn’t growing, market growth has been small. Greater effort is being put into advertising and this is the only major market in the world Apple claims it’s not doing well in.
Apple shares rose 10% to US$102.55 in late day trading for Wednesday.

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