Q2 FINANCIALS CONF CALL COVERAGE ONGOING, SEE AT THE BOTTOM OF THIS ARTICLE
Apple has just announced revenue of $5.26 billion on $770 million of profits for Financial Q2 2007, a yearly earnings increase of 88%.
Apple sold 1.517 million Macs and 10.549 million iPods this quarter, respectively representing 36% and 24% increase from last year. Mac sales were mainly boosted by MacBooks (891 000) while the iPod shuffle helped to maintain iPod sales at reasonable levels.
But the most amazing figure in Apple's Q2 financial report is the gross margin record of 35.1% up from last quarter's 31% and last year's 29.8%. No other computer or consumer electronics company can do that.
Guidance for Q3 is $5.1 billion of revenue on earnings of $0.66 per share.
The company beat both its own and analysts estimates both in terms of revenue and profits. Apple had provided guidance of about $4.7 to 4.8 billion of revenue while analysts were expecting on average $5.5 billion of revenue and earnings of $0.63 per share.
Meanwhile, board members made [1] the following statement minutes before the results were announced:
We are not going to enter into a public debate with Fred Anderson or his lawyer. Steve Jobs cooperated fully with Apple's independent investigation and with the government's investigation of stock option grants at Apple. The SEC investigated the matter thoroughly and its complaint speaks for itself, in terms of what it says, what it does not say, who it charges, and who it does not charge. We have complete confidence in the conclusions of Apple's independent investigation, and in Steve's integrity and his ability to lead Apple.
Today is also a milestone day for the Dow Jones which broke its all time record beyond 13 000 points, boosted by this week's earnings releases.
NOTICE: NON-LOGGED-IN VISITORS WILL SEE THE UPDATES WITH ONE MINUTE OF DELAY, THANK YOU FOR YOUR UNDERSTANDING
Q2 Financial results Conf Call coverage:
- Starts at 2pm PT / 5pm ET
- (Apple stock skyrockets at $103, more than 8% jump)
- Peter Oppenheimer (Apple CFO): iPhone years ahead of the competition, new software applciations to arrive at no additionnal charge.
- Peter Oppenheimer: Apple TV to receive new features at no charge as well
- Retail: 177 stores at all (added 7 in Q2) 5 million of average revenue per store, 3rd store upcoming in Manhattan, 79% of growth overall
- iPod: Sales grow 24%, iTunes grows too with movies from Lionsgate, MGM, Paramount...
- iPhone Stores are preparing for the biggest launch ever
- iPhone/Apple TV accounting: iPhone sales to be accounted on a subscription basis, 24 months after the sale. Apple TV revenue will also be deferred
- Peter Oppenheimer: other innovative products in the pipeline
Q/A:
- Question on the backdating case: Peter repeats the statement made just before the results.
- Question on the Leopard delay and lack of R&D staff: Peter says it's a "one-time" event, there is no general issue on staffing.
- Peter O.: Gross margin down next quarter because of lower priced education sales and seasonal iPod sales drop, current margin not sustainable
- Question on iPhone supplies for June: "Very difficult to tell what demand is until you're actually shipping the product"
- Question on the cash balance of $12.6 billion: No plans to make any acquisition.
- Question on if the subscription accounting means iTunes subscription-based service: No, just an accounting maneuver
- Will purchases be delayed because of Leopard? We have the best product line ever. It's easy to upgrade. We don't know how it will impact.
- Why commodity costs decrease didn't impact pricing? Our products are already very competitively priced
- Question on the profitability of new DRM-free iTunes songs: iTunes will continue at "a little above breakeven"
- iPhone International release schedule: Europe in Q4, Asia in 2008 as announced
- iPhone profit margin projections: No projections, "we can't wait to launch the product!"