Apple earns $770M profit on sales of $5.26B
Apple said Wednesday it just completed the most profitable March quarter in the company's history, where earnings rose 88 percent, helped by sales of nearly 1.52 million Macs and 10.5 million iPods.
For the fiscal second quarter ended March 31, 2007, Apple earned a net profit of $770 million, or $.87 per diluted share, on sales of $5.26 billion. Those results compare to a net quarterly profit of $410 million, or $.47 per diluted share, on sales of $4.36 billion in the year-ago quarter.
During the quarter, Apple shipped 1,517,000 Macintosh computers and 10,549,000 iPods, 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."
Gross margin for the quarter came in at 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of revenue.
Looking ahead to the third fiscal quarter of 2007, the Cupertino-based company said it expect revenue of about $5.1 billion and earnings per diluted share of about $0.66.
Apple will provide live streaming of its Q2 2007 financial results conference call utilizing QuickTime. The live webcast will begin at 2:00 p.m. PDT on Wednesday. AppleInsider will provide its usual in-depth coverage.
For the fiscal second quarter ended March 31, 2007, Apple earned a net profit of $770 million, or $.87 per diluted share, on sales of $5.26 billion. Those results compare to a net quarterly profit of $410 million, or $.47 per diluted share, on sales of $4.36 billion in the year-ago quarter.
During the quarter, Apple shipped 1,517,000 Macintosh computers and 10,549,000 iPods, 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."
Gross margin for the quarter came in at 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of revenue.
Looking ahead to the third fiscal quarter of 2007, the Cupertino-based company said it expect revenue of about $5.1 billion and earnings per diluted share of about $0.66.
Apple will provide live streaming of its Q2 2007 financial results conference call utilizing QuickTime. The live webcast will begin at 2:00 p.m. PDT on Wednesday. AppleInsider will provide its usual in-depth coverage.
Comments
"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."
I hope one of those productsin the pipeline is a new iSight camera.
I clicked play, QT opened and nothing is happening.
edit: All's good. It seems I was early to the party.
Grats to Apple and all the consumers who made this possible.
But... "and are also hard at work on some other amazing new products in our pipeline."
I REALLY hope that profit gets put into getting more programmers and such then. We don’t need MORE OS delays here. *Pokes apple*
Apple needs to introduce new models at slightly lower price points to continue market share growth...
imagine how much profit they would have made if they had SOME NEW PRODUCT RELEASES in the past 3 months
Like the Apple TV?
Although 35.1 percent gross margin is great for the bottomline, it also indicates that some Apple products are perhaps a bit overpriced. Not surprising since prices for many components (processors, DRAM, flash, hard disks, LCD monitors) are much lower right now compared to when most of the current Apple product line was introduced last year.
Apple needs to introduce new models at slightly lower price points to continue market share growth...
If sales are still growing, then by definition they're not "overpriced." OTOH, I'd be curious to see how Mac mini sales are doing right now...
If sales are still growing, then by definition they're not "overpriced."
Not necessarily. It could well be that Mac sales would've grown even faster if the prices were a bit less. In fact, that's not really a leap at all.
The real question is, at what point is the price so low that profits/margins are compromised to the point where increased sales volume does not come anywhere close to making up for it. Looking at those 35 percent margins, I don't think Apple is in much danger of living too thin. And given the extended Leopard delay, it might be a good time to hit some price points and get some updated hardware on the shelves.
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"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."
He is probably just referring to Leopard.
I'm sure they've got other hardware in the pipeline but I don't expect to see Apple expanding into any other product categories this year.
AppleTV still needs a lot of work to round out it's capabilities.
The iPhone is also a huge undertaking and is spreading resources thin.
As much as I'd like to see a consumer RAID solution to go with TimeMachine, I don't think we will see anything the MWSF 08.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
As a matter of note, Peter Oppenheimer's (CFO) rationale for this treatment is that Apple will provide progressive software updates over the course of time that warrant the spread of income in this fashion. One analyst made note that the iPod, which also gets software updates, does not get this treatment.
Whether it's one scenario or the other, it bodes well for us Apple fans... but i'm hoping it means HD rentals...
In listening to the analyst call, they remarked on the use of an accounting methodology whereby revenue is being recognized for both the iPhone and (curiously) Apple TV over a 24 month period. In looking at the iPhone, this seems to lend credence to the notion that AT&T is giving Apple a cut of the monthly subscriber charges -- definitely sweet music to the bottom line. This will get the Nokias and Motorolas of the world seething.
Now, Apple TV having the same accounting treatment is curious... Might this be a harbinger for the video rental model?
Nice catch. One can only hope it's true!
Gross margin for the quarter came in at 35.1 percent
However, having said that, I do think that 35.1% is "too high", in that they've misjudged the profitability vs. price-competetitive trade-off. Yes, Mac sales are growing, iPod sales are growing, but I strongly believe that they would grow even faster with margins in Apple's traditional 25 - 30% margin range (which is still much higher than the likes of Dell).
That's my favourite line, and hopefully will open Apple's eyes.
Want to make even more profit? Get tv shows and movies on international iTunes stores. Release the iPhone at the same time (or as close as possible) as in the U.S. Spend more marketing money outside of the U.S. Open more Apple stores outside of the U.S. (Ireland, please). Do more in general outside of the U.S. And finally, though it's never going to happen, stop selling products in Europe at nearly twice the price (£1 == $2, £1 != $1.25!)
"International sales accounted for 43 percent of revenue."
That's my favourite line, and hopefully will open Apple's eyes.
Want to make even more profit? Get tv shows and movies on international iTunes stores. Release the iPhone at the same time (or as close as possible) as in the U.S. Spend more marketing money outside of the U.S. Open more Apple stores outside of the U.S. (Ireland, please). Do more in general outside of the U.S. And finally, though it's never going to happen, stop selling products in Europe at nearly twice the price (£1 == $2, £1 != $1.25!)
Yes, very impressive. With the low dollar now, Apple should definitely capitalize on this... Go, Steve-O!