Apple Reports $19 Million Profit for Q3

pinqkandi writes "Apple released it's quarter three results today, which revealed a $19 million net profit ($0.05/diluted shared). Revenue reached $1.545 billion as 771,000 Macs were shipped. CEO Steve Jobs called it 'a great new product quarter', citing the new generation of iPods, iTunes Music Store, and the PowerMac G5."

Comments

It has been a good year.

[Dr Reducto]

Apple has turned their business around and generated a lot of mainstream press this year. They finally made their Powermacs top of the line, they made the 17in laptop, the new iPods, and it now looks really good for Apple. They should hive themselves a pat on the back.

And on an unrelated note, this may be a First Post.

Re:It has been a good year.

[Dr Reducto]

Yeah, that is a good point. Apple comes out with something uber-cool, and the PC world just sits back and says: "We just increased our processor speed by .5 gHz" or "The New version of Windows will be out in 6 months". Apple works on getting things done that haven't been done before, or done at all, consequences be damned.

Re:It has been a good year.

[chia_monkey]

It's been a very good year indeed. The interesting thing to note is how different Apple's products and services are now as to how they were a few years ago when the only thing you could read about Apple was how beleaguered they were and close to death.

For example...Apple then:
They sold computers. Sure they sold the OS and a few other things (monitors, other software, etc), but that was it.

Apple now:
Computers. And laptops which are definitely helping them gain some market share again. And MORE software such as Safari (even though it's free...who would have guessed they'd do something like that?), Keynote (you brave bastards), FinalCut Pro (do I really need to talk about their high-end software?), everything in their iLife bundle.
Better yet...the iPod. Shnikeys! They're making some good money off that. It's new hardware that's not a computer. And good money.
iTunes Music Service...for something that only serves 3% (who knows what the real number is...it changes daily) of the market, they're doing DAMN good with that. Imagine when it comes out for the PC.

It's funny to compare the Apple of today to the one of yesterday. Worlds apart.

Re:It has been a good year.

[Graff]

linux is making huge headway, but not many people seem all that excited about it

It's all a matter of who Linux is suited for and targeted at. Linux is a great operating system that kicks ass as a server platform and is great for many tasks but it is not really an operating system for the masses, no matter how great the strides have been in attempting to make it so. It is because of this that there aren't droves of non-technically inclined people rushing to it. This doesn't make Linux any less great, it just means that you won't see it pushing other operating systems off the desktop just yet.

As for MacOS, it is designed especially for the non-techs with the addition of a stable BSD and Mach core for the techs. It tries to give the best of both worlds to its users without sacrificing much of either and it succeeds fairly admirably. In addition Apple seems to be smart enough not to try to compete with any of the other minor platforms but instead tries to work with and even enhance them by giving back code and working on free (speech, beer...whatever) projects.

G5 Laptops Highly Unlikely

[Anonymous Coward]

I guess that last Anonymous Coward was trying to be funny by making everyone double check Apple.com for new laptops.

However, it is unlikely we'll see G5 laptops anytime soon. The current IBM 970 chips run way, way too hot. Until a low-power version of the G5 is designed, expect G3's and G4's to continue to be the chips in laptops for some time.

Profit for 1 reason

[BigBir3d]

$4billion cash reserve that makes nice interest as it sits in the bank.

Re:Profit for 1 reason

[GlassHeart]

Your point is valid, but Apple is one of only a few companies doing anything interesting in this field right now. Within the past year or so, they have release several new software products (Safari, Keynote, Final Cut Express, and most recently Soundtrack), a new line of desktops featuring a new CPU, and at the same time updating just about every existing software title except maybe Appleworks, and every hardware product that I can remember. On top of that, they built an on-line music store.

Each of these take significant investments. The G5 line has not made a single dollar of profit yet, but must have consumed a lot of NRE dollars. This is precisely the stage where companies lose money developing new products, so Apple is just lucky that they have huge reserves to still turn a small profit.

All in all, your observation is rather cynical. It's almost as if you're suggesting that Apple would be a better company if they just laid everybody off, and turn a nearly guaranteed profit each quarter from bank interest.

Re:my mac is simply too slow

[daviddennis]

Either you're a troll, or something's wrong with your system.

I've passed gigabytes from my PowerBook G4/1ghz to my LaCie 200gb FireWire drive in less time than that, and generally I've found performance of internal drives is much better than external.

I would bring your system to an Apple Store and ask the Genius Bar people to take a look at it.

That being said, in my experience, the speed of a Mac isn't much different from PC speed one way or the other, and the aesthetics are a great deal more attractive. I find it more enjoyable to use a Mac, and that pretty much closes off debate for me.

Hope that helps.

D

Re:Dirty MP3 pirates paying for music????

[Alan Partridge]

Here's a little revision for us capitalists:-

1) Listen to customers.
2) Sell them what they want.
3) Profit.

See the difference?

Mac Units?

[TechnoPope]

What exactly is a Mac unit? Is it just a computer, or does it also include the always popular Ipod? I'm not saying I doubt that they sold 771,000 PC's in a quarter, but it seems a little weird. Especially since apperently profits were actually down. I'd assume they make less profits on the Ipod then other things. Just wondering.

Re:Mac Units?

[tenton]

You can see the breakdown.

The iPods are considered "Peripherals & Other HW"

The 771,000 doesn't include iPods...it's only PowerMacs, Powerbooks, iBooks, and iMacs (the eMacs are part of the iMac numbers, the server units, ie XServer is part of the PowerMac units).

The breakdown is like this (in the thousands, of course):
iMac: 256
iBook:133
Power Mac G4: 156
PowerBook: 166

And don't forget...

[rjung2k]

...the economy. A lot of people are tightening their belts, and are not in the mood to buy anything from anyone. For any tech company to be making any sort of profit in this climate is a minor miracle in and of itself.

Re:Low revenue?

[pmz]

Isn't $19 million in profit awfully low for $1.545 BILLION in revenueThat gives them a profit margin of about 1.25%.

I'd say we should be ecstatic that the number was positive, regardless of magnitude. This means, at a minimum, Apple is stable in the near-term and won't disappear in a vapor in a bankrupcy court anytime soon. As long as they stay afloat, they can keep sticking irritating glass fibers into Microsoft's pale skin.

That was *last* quarter

[overunderunderdone]

This did in fact happen last quarter (the profits being all in interest on the $$ in the bank while the business otherwise would have shown a loss). THIS quarter however they did in fact run a profit off of their business of selling computers. Also to be fair they are doing some things this quarter that cost a fair amount of $$$ that are investments that will reap rewards in future quarters. Opening new stores and opening the iTunes music store - which is actually supposed to turn the corner as soon as this next quarter, and may be a real cash cow when it comes out for windows.

Re:Haha

[tres]

Doesn't seem too sad when you look at the state of the economy, when you take into account that many purchases of Apple Macintosh computers were put off until next quarter because of the upcoming next generation hardware.

It doesn't seem sad at all.

OS X and Apple Stores are working...

[metamatic]

From Investor's Business Daily:

Apple's share of U.S. consumer PC unit sales rose to 3.4% in the first quarter, up from 1.9% two years earlier. Its share of dollars spent on consumer PCs rose from 2.3% to 5.2%.

Things are brighter in the U.S. consumer notebook PC segment. Apple's unit market share rose from 0.3% to 6.8% in the two years. And its share of the market based on dollars spent rose from 0.2% to 8%.

This says to me that xServe isn't managing to push the Mac into the business server market, but OS X and nifty hardware have lead to a major jump in consumer sales.

Re:I love apple, but...

[overunderunderdone]

Why? Because profit is money wasted. Better to invest your capital than give it away to shareholders.

A little confusion over who's money it is? The investors quite literaly own the company and it is their money, their company and it is (supposed to be & is legally obligated to be) run for their benefit. Actually, stictly speaking they ARE the company - a collective body of individuals (the shareholders) that in a limited way can legally act as though they were a single individual (to do things like hire you to make them more money). They are usually more than happy letting you reinvest their profits if it will lead to a bigger, healthier, MORE PROFITABLE company in the future but that is a very different thing froms saying profit is "money wasted" and that it is better to inveset than "give it away to shareholders".

Re:A long road still ahead

[Juanvaldes]

According to this in 1993 apples share was 10%. While this chart gives no idea on actually installed base we do know the PC market is MANY times larger today then it was 10 years ago resulting with a small % that apple can serve.
But you are very right in apple still has a LONG road ahead, hopefuly apple from one side, Linux from the other and the PC market can be broken into three dominant platforms.
Hey, I can dream can't I? ;)

Re:Haha

[tyrione]

Rougly 771,000 x 4 periods would be roughly 3 million units per year.

In 4 years that would be rougly 12 million units.

Apple hardware tends to last 4 years so nice guaranteed business.

Assuming interest peaks as the job market goes from the Abyss back to normalcy and people start spending money you'll see more of a surge in purchases as more and more compelling pieces of software keep surfacing with each innovation.

Being Porsche has never been being Ford, but everyone would love to own a Porsche and outside of the battle of Chevy vs. Ford on trucks who the hell wants to settle for a Ford if they can enjoy a Porsche?

Porsche seems to survive and has been around quite a long time.

Music is Apple's Future

[jamesmrankinjr]

Apple's growth prospects are all wrapped up in Music.

• iPod sales way up, especially with Windows version.
• 6.5MM songs sold WITHOUT a Windows version. Huge growth potential here, and scales nicely (marginal cost of selling a song is roughly 0, compared to computers which have large fixed costs).
• iTunes Music Store for Windows should create even more iPod sales, completing the virtuous circle.

So outlook for growth in Apple profits is tied strongly to its music business, much more so than computer sales.

Best,
-jimbo