Apple's Second Quarter 2007 Financial Results: $770 Million Profit
Apple released their second quarter 2007 financial results today.
Apple posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. This compares to revenue of $4.36 billion and net profit of $410 million in the year-ago quarter (Q2 2006).
Apple shipped 1,517,000 Macs and 10,549,000 iPods this quarter, representing a 36% increase in growth in Macs and 24% increase in iPods compared to the year-ago quarter.
Apple will broadcast the financial results live at 5pm ET. Highlights posted below.Conference Call Notes
iPhone is "years ahead of the competition". Plan to continue to develop new software features and entirely new applications and incorporate them into the iPhone. We want to provide many of these new features and applications at no additional charge to users. As a result, Apple will be accounting for the iPhone income over a 24 month period rather than an up-front amount.
Plans to periodically provide periodic enhancements and updates at no charge to Apple TV customers, so Apple TV will be accounted for with the same 24-month linear spread.
Q/A:
The reason why Apple TV will be accounted for on a subscription basis. A number of ideas/improvements to the Apple TV which will be deployed in the future.
Q: How should be think about the potential of iPod in face of iPhone. How do you think the delay on Leopard will have an impact on Mac sales.
A: Re: iPod. No obvious effect on iPhone announcement on iPod. In terms of Leopard, we are shipping the best Macs we've ever shipped before. The upgrade to Leopard is simple/straightforward to do, don't know if customers will delay or not.
Q: Given the lead time for the iPhone announcement, any advantage on ramping for June?
A: Working hard on iPhone. Can't predict the ramp at this point.
Q: Pre-orders for iPhones?
A: Currently not, we will announce later the date at which we are taking orders.
Q: Your retail staff is typically waiting for products. Are they going through training now?
A: A number of things are different. Sometimes products are secret until announcement. iPhone is different in that it was preannounced.
Q: So they will be fully trained at day 1?
A: They are putting a lot of energy into the launch.
Q: Fully staffed support for the product?
A: We have award winning support for the Mac and iPod and going after the iPhone with the same rigor.
Q: Any more distribution partners re Best Buy / Circuit City?
A: Best Buy to over 200 stores now. will take place by the fall. We are very excited to do that. Still determining Circuit City role.
Q: Any uptick in professional customers?
A: We do think that CS3 has delayed pro customer purchases. Too early to tell.
Q: Why not passing along more component savings during the quarter?
A: We believe our products are very competitively priced.
Q: On the new EMI deal. Assuming some of the other labels join with there be any change in iTunes revenue?
A: Our philosophy has been to run the music store as a little over break even. We think that selling music/videos helps us sell iPods/accessories.
Q: On the channel side, direct sales vs indirect mix?
A: The direct sales (online, stores, and direct) was 50% in the quarter and close to expectations.
Q: iPhone worldwide?
A: Europe: 4th Calendar Quarter. Asia: 2008.
Q: iPhone sold where?
A: Cingular stores, Apple.com, Apple stores.
Q: Better understanding of the internal design strategy. With the drop in NAND flash, has that influenced product design and what you plan on introducing in the future?
A: We don't comment on the future products.
Q: On Japan, they continue to lag/be flat. What are you going to do?
Q: Under expenses, you're guiding expenses up a little, what plans on programs?
A: Japan is very challenging market for us. The MP3 market isn't growing, and stable marketshare for iPods. We have a number of initiatives. Mac/PC ads. The only major market that we are not doing as well in. Very frustrating. Continuing to invest for long term growth. Increasing spending in our engineering. Also in other marketing, and stock based compensation.
Apple posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. This compares to revenue of $4.36 billion and net profit of $410 million in the year-ago quarter (Q2 2006).
Apple shipped 1,517,000 Macs and 10,549,000 iPods this quarter, representing a 36% increase in growth in Macs and 24% increase in iPods compared to the year-ago quarter.
"The Mac is clearly gaining market share, with sales growing 36 percent -- more than three times the industry growth rate," said Steve Jobs, Apple's CEO. "We're very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline."
Apple will broadcast the financial results live at 5pm ET. Highlights posted below.Conference Call Notes
iPhone is "years ahead of the competition". Plan to continue to develop new software features and entirely new applications and incorporate them into the iPhone. We want to provide many of these new features and applications at no additional charge to users. As a result, Apple will be accounting for the iPhone income over a 24 month period rather than an up-front amount.
Plans to periodically provide periodic enhancements and updates at no charge to Apple TV customers, so Apple TV will be accounted for with the same 24-month linear spread.
Q/A:
The reason why Apple TV will be accounted for on a subscription basis. A number of ideas/improvements to the Apple TV which will be deployed in the future.
Q: How should be think about the potential of iPod in face of iPhone. How do you think the delay on Leopard will have an impact on Mac sales.
A: Re: iPod. No obvious effect on iPhone announcement on iPod. In terms of Leopard, we are shipping the best Macs we've ever shipped before. The upgrade to Leopard is simple/straightforward to do, don't know if customers will delay or not.
Q: Given the lead time for the iPhone announcement, any advantage on ramping for June?
A: Working hard on iPhone. Can't predict the ramp at this point.
Q: Pre-orders for iPhones?
A: Currently not, we will announce later the date at which we are taking orders.
Q: Your retail staff is typically waiting for products. Are they going through training now?
A: A number of things are different. Sometimes products are secret until announcement. iPhone is different in that it was preannounced.
Q: So they will be fully trained at day 1?
A: They are putting a lot of energy into the launch.
Q: Fully staffed support for the product?
A: We have award winning support for the Mac and iPod and going after the iPhone with the same rigor.
Q: Any more distribution partners re Best Buy / Circuit City?
A: Best Buy to over 200 stores now. will take place by the fall. We are very excited to do that. Still determining Circuit City role.
Q: Any uptick in professional customers?
A: We do think that CS3 has delayed pro customer purchases. Too early to tell.
Q: Why not passing along more component savings during the quarter?
A: We believe our products are very competitively priced.
Q: On the new EMI deal. Assuming some of the other labels join with there be any change in iTunes revenue?
A: Our philosophy has been to run the music store as a little over break even. We think that selling music/videos helps us sell iPods/accessories.
Q: On the channel side, direct sales vs indirect mix?
A: The direct sales (online, stores, and direct) was 50% in the quarter and close to expectations.
Q: iPhone worldwide?
A: Europe: 4th Calendar Quarter. Asia: 2008.
Q: iPhone sold where?
A: Cingular stores, Apple.com, Apple stores.
Q: Better understanding of the internal design strategy. With the drop in NAND flash, has that influenced product design and what you plan on introducing in the future?
A: We don't comment on the future products.
Q: On Japan, they continue to lag/be flat. What are you going to do?
Q: Under expenses, you're guiding expenses up a little, what plans on programs?
A: Japan is very challenging market for us. The MP3 market isn't growing, and stable marketshare for iPods. We have a number of initiatives. Mac/PC ads. The only major market that we are not doing as well in. Very frustrating. Continuing to invest for long term growth. Increasing spending in our engineering. Also in other marketing, and stock based compensation.
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63 months ago
http://www.apple.com/pr/library/2007/04/25results.html
Headline numbers
EPS $0.87
Sales $5.26B
Gross margin 35.1% !!
1517000 macs
10549000 iPods
Apple Reports Second Quarter Results
Earnings Grow 88 Percent Year-over-Year
CUPERTINO, California—April 25, 2007—Apple® today announced financial results for its fiscal 2007 second quarter ended March 31, 2007. The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue.
Apple shipped 1,517,000 Macintosh® computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.
“The Mac is clearly gaining market share, with sales growing 36 percent—more than three times the industry growth rate,” said Steve Jobs, Apple’s CEO. “We’re very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline.”
“We are very pleased to report the most profitable March quarter in Apple’s history,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”
Apple will provide live streaming of its Q2 2007 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 25, 2007 at www.apple.com/quicktime/qtv/earningsq207/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
This press release contains forward-looking statements about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include potential litigation and government enforcement actions that may result from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; continued competitive pressures in the marketplace; the continued availability on acceptable terms of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the effect that product quality problems could have on the Company’s sales and operating profits; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company’s dependency on the performance of distributors and other resellers of the Company’s products; the Company’s reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; and risks associated with the Company’s retail initiative, including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 30, 2006, its Form 10-Q for the quarter ended December 30, 2006 and its Form 10-Q for the quarter ended March 31, 2007 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone.
Rocketman
Headline numbers
EPS $0.87
Sales $5.26B
Gross margin 35.1% !!
1517000 macs
10549000 iPods
Apple Reports Second Quarter Results
Earnings Grow 88 Percent Year-over-Year
CUPERTINO, California—April 25, 2007—Apple® today announced financial results for its fiscal 2007 second quarter ended March 31, 2007. The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter’s revenue.
Apple shipped 1,517,000 Macintosh® computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.
“The Mac is clearly gaining market share, with sales growing 36 percent—more than three times the industry growth rate,” said Steve Jobs, Apple’s CEO. “We’re very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline.”
“We are very pleased to report the most profitable March quarter in Apple’s history,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $.66.”
Apple will provide live streaming of its Q2 2007 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 25, 2007 at www.apple.com/quicktime/qtv/earningsq207/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
This press release contains forward-looking statements about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include potential litigation and government enforcement actions that may result from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; unfavorable results of legal proceedings; the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; continued competitive pressures in the marketplace; the continued availability on acceptable terms of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the effect that product quality problems could have on the Company’s sales and operating profits; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company’s dependency on the performance of distributors and other resellers of the Company’s products; the Company’s reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; and risks associated with the Company’s retail initiative, including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships. More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 30, 2006, its Form 10-Q for the quarter ended December 30, 2006 and its Form 10-Q for the quarter ended March 31, 2007 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone.
Rocketman
63 months ago
86 cents vs estimate of 64cents
After hours trading over $100/share!
Is that your guess? Im guessing 72 cents with lots of talk about AppleTV (I think it has sold more than most have expected).
63 months ago
Is that your guess? Im guessing 72 cents with lots of talk about AppleTV (I think it has sold more than most have expected).
No, that is the actual. Now trading at $102.58!
Apple is warning about Q3. Pulling the guidance down a couple of cents. Leopard is being blamed for this by the analysts.
63 months ago
No matter what you say about Jobs, he's done a remarkable job making Apple better than ever.
63 months ago
Absolutely demolished all estimates. I'm so happy I finally bought some in january.
Now looking forward to the conference call so Steve can talk up the stock another 5%.:D
Now looking forward to the conference call so Steve can talk up the stock another 5%.:D
63 months ago
New Products in the pipeline?:eek:
Yipeeee! Oh nooooooooo! All at the same time.
Congrats to Apple on all the success. I will be buying my new Mac as soon as Leopard comes out and I already have my money saved for my "first" iPhone. The wife wants one too. :D
Yipeeee! Oh nooooooooo! All at the same time.
Congrats to Apple on all the success. I will be buying my new Mac as soon as Leopard comes out and I already have my money saved for my "first" iPhone. The wife wants one too. :D
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