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Apple Profits Up Due to mini and iPod
dmarx writes "The Ottawa Business Journal reports that Apple's profits have increased more than sixfold. Apple's Q2 profit was $290 million, or 34 cents/share; their total revenues were $3.24 billion. The iPod accounted for 31% of Apple's sales, about $1 billion." Commentary also available on BusinessWeek and ZDNet.
dude, take a look at the two year report, no the report for today http://chart.finance.yahoo.com/c/2y/a/aapl.gif There is deffinitly a steady and steep rise here.
revenues are about 5% of microsoft's. Price to earnings ratio is about twice that of microsoft and dell. earnings this quarter are down from last quarter, but up 5 fold from last year. Oddly while earnings were 50% higher than the predicted earnings (24 cents verus 36 cents per share), the stock has fallen 8% in the last two days. Are people dissatisfied that apple did not exceed expectations by more? I dont get it.
On the other hand maybe people are just going elsewhere. I note that the annual earnings per share is about half that of dell. However its pretty clear that the upward trend for apple is so large that if it continues it will be twice that of dell by next year. Apple is now growing faster than the computer industry as a whole (which is dominated by dell and microsoft). Apple sold 1 million macs and 5 million ipods in the last quarter alone. Look for an earnings bump the next quarter from Tiger and then another bump in fall with the back-to-school release of new hardware, and it looks like year of sustained earnings.
notably thi
Some drink at the fountain of knowledge. Others just gargle.
Are people dissatisfied that apple did not exceed expectations by more? I dont get it.
They're dissatisfied by the creation of 13 million new shares through the exercise of options, and they're wary because the price has already tripled in the past year. They might also see the iPod numbers as indicating that the low-margin shuffle is responsible for the rise in unit sales. (Compared to last quarter: unit sales up by almost a million, revenue down by about $200 M, per-iPod revenue down by about $70.)
No surprises here. Could be a buying opportunity if you figure Tiger will drive an upgrade cycle and bring some nice high-margin software sales...but it's a speculative gamble no matter how you look at it.
- 18.8% iRiver
- 18.6% Rio
- 15.8% Digital Way
- 8.8% RCA
- 6.2% Samsung
Apple is now claiming that the iPod Shuffle, after one quarter on the market, has 43% market share. In a segment where the existing players were battling to see who'd reach 20% share, that's pretty scary. Of course, all these numbers are probably US-only, but still.Village idiot in some extremely smart villages.
Clearly, Apple can afford to better compensate its employees.
I propose that Steve Jobs's salary be raised to $2.00 per year!
Who's with me?
Village idiot in some extremely smart villages.
is a pretty good one: penetrate markets with low priced products that get people hooked on the elegance and simplicity of Apple's designs. I picked up an iPod last year because of all of the buzz. After playing with it for awhile, I realized how brilliant Apple's design was. So, I decided to check out what else they had at the local Apple store. OS X seemed to be so easy to use, not to mention the power of having a CLI with every utility I'm used to using with linux, I had to buy a PowerBook. Now I do all my development work as well as meet my other desktop application work on one machine that JUST WORKS. I don't have spyware/virus worries. I don't have to worry about finding a driver that works for my wireless card. I just power on and start working.
I used to laugh at the Mac zealots... now I know what they were so excited about.
Sometimes I don't get it.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Not nearly as well as it would have done if they could supply enough to match demand, that's for sure.
Drag n' Drop DVD Recommendations
As a shareholder, I have spent the day perplexed and amazed at the 9% fall today (as well as a 5% fall post-market close!)
I summarize the reasoning thusly:
- Apple's gudance for Q3'05 is the same as the Q2'05. That is, Apple guided analysts towards $0.28 cents per share or about $3.15B for next quarter. This is EXCELLENT right? Well some analysts didn't think so because it is just about the same $3B that Apple posted this quarter. The analysts see the guidance as showing Apple is expecting flat growth. Further compouding this is the fact that the just ended Q2 is typically Apple's weakest of the 4 quarters and so Q3 should be higher than Q2. Offsetting this logic is the fact that in this quarter apple intorduced the iPod Shuffle which was quickly swooped up and generated a great deal of sales not typical for Q2.
- Average price per sale (APS) was lower this quarter than peviously. Now lets try to figure this one out. Apple introduced the Mac mini at $499 and the Shuffle at $99. Demand for the products was high. The average of a $99 Shuffle and a $499 iPod Photo is $299. If Apple sells the same number of iPod Photos but also sells a ton of Shuffles, then the APS drops. (Duh, this is basic math.) The analysts don't like that though - they want high sales, high margins, and high profits. The logic escapes me. For years analysts say "lower your prices so you will sell more" Apple does, and is beat with the Bear stick by the Market.
- Finally, there is the "iPod can't keep this up" camp that is so damn afraid that any moment now Sony will unseat Apple's 70% market share (No worry that Sony doesn't even account for a tenth of that market today). Also there are the people who think that as soon as there is a WMA player built into a cell phone, everyone will buy that instead of the iPod (No worry that Apple and Moto are about to release their own iTunes phone this year).
So there you have it. my personal views. I own the stock so take that into consideration. I am also clammoring up some cash to buy more because I see the $36 and change stock price as pretty darn tastly for a stock that just beat bullish earnings estimate by a dime (that's two nickles) and whose forward PE is 20 though it's trailing is three times that. But don't you go buying up AAPL just because you read this because that would be plain foolish.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.