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Apple Announces $1.07 Billion in Profit for Q3 2008

Monday July 21, 2008 1:32 pm PDT by Arnold Kim
Apple announced their 3rd Quarter 2008 Financial Results today. Apple posted revenue of $7.46 billion and net quarterly profit of $1.07 billion (or $1.19 per diluted share). This compares favorably to revenue of $5.41 billion and net quarterly profit of $818 million (or $.92 per diluted share) in the year-ago quarter. Apple shipped 2,496,000 Macintosh computers and 11,011,000 iPods this quarter.

"We're proud to report the best June quarter for both revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "We set a new record for Mac sales, we think we have a real winner with our new iPhone 3G, and we're busy finishing several more wonderful new products to launch in the coming months."

Looking to the fourth fiscal quarter 2008, Apple expects to earn a revenue of $7.8 billion and earnings per diluted share of about $1.00.

The Mac sales numbers represent 41% unit growth over last year's quarter and the iPod sales represent 12% unit growth over last year's numbers. As we previously reported, Apple's results do not include iPhone sales, which were deferred until the 4th quarter. Apple's financial results webcast will begin at 5pm ET / 2pm PT. MacRumors will provide running highlights of the webcast.

Steve Jobs hints at "several more wonderful new products to launch in the coming months" in Apple's press release.

Conference Call Highlights

- Very pleased to report highest June quarter earnings and revenue.
- 38% growth in revenue over previous year-ago quarter
- Highest quarterly Mac shipments ever
- Continues to see healthy growth in all regions, sales in retail stores very strong
- Mac: 2.5 million Macs shipped. Most in any quarter in Apple's history.
- Apple's share of total personal computers up to 19.5% in June
- Best Mac quarter ever in U.S. education
- Sold 11 million iPods. Up 12% from year ago.
- Great start with iPhone 3G. 22 Countries. 1 millionth iPhone 3G just 3 days after its launch.
- Customer reaction to iPhone 3G overwhelmingly positive.
- App Store: offers more than 900 applications, with 20% free. 90% less than $10.
- Customers loving the App Store. Over 25 million Apps downloaded so far.
- Retail Stores. 476,000 Macs sold. 1/2 were sold to customers new to Mac.
- 216 Stores Worldwide by end of Quarter. Extending international stores. Switzerland and Germany coming.
- Looking forward to 4th Quarter: Great start with iPhone 3G. Expect to sell more iPhones in Q4 than any previous quarter. Due to subscription recording, much of the revenue will be deferred to future quarters. "Future product transition". Can't discuss today.
- More great new products later this year.

Question and Answer Highlights

- International sales growing well. Beijing store doing well already.
- Added 170 Best Buy stores. Total of 570. 600 by end of summer.
- Apple introduces new products that initially cost more because they deliver a new level of value to the customer. Then drive costs down and staying out of reach of our competitors. Apple will follow this plan again in the future.
- Question regarding Steve Jobs' health. Answer: Jobs has no plans to leave Apple. Steve's health is a private matter.
- Apple TV remains a "hobby" because its not a very large business and still continuing to invest in it.
- Stunning response to iPhone 3G. Sold out due to overwhelming demand. Pleased with production ramp. Shipping units as fast as they can. Trying to catch the demand. Confident enough that they will be launching about 20 additional countries on August 22nd. And over 70 countries later this year.
- Apple reiterates they will be delivering state of the art new products at prices their competitors can't match. Very excited about what they have in their new product pipeline.
- Significant interest in Enterprise adoption for the iPhone 3G.
- Looks at App Store like the iTunes Store. Not a huge revenue generator. Instead something to make the iPhone and iPod touch more attractive.
- Welcomes competition from mobile phone companies and believe they are well positioned with the iPhone.

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