Apple profits rise 26% on sales of 2.6M Macs, 6.8M iPhones

Posted:
in General Discussion edited January 2014
Apple said Tuesday that fourth-quarter profits rose more than 26 percent to $1.14 billion, or $1.26 per diluted share, on sales of $7.9 billion for the three-month period ended September 27, 2008.



Those results compare to revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter's revenue.



Apple shipped 2,611,000 Macintosh computers during the quarter, representing 21 percent unit growth and 17 percent revenue growth over the year-ago quarter. The company sold 11,052,000 iPods during the quarter, representing eight percent unit growth and three percent revenue growth over the year-ago quarter. Quarterly iPhone units sold were 6,892,000 compared to 1,119,000 in the year-ago-quarter.



"Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone -- we sold more phones than RIM," said Apple chief executive Steve Jobs. "We don't yet know how this economic downturn will affect Apple. But we're armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt."



In accordance with the subscription accounting treatment required by GAAP, Apple recognizes revenue and cost of goods sold for iPhone and Apple TV over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures for the quarter are $11.68 billion of "Adjusted Sales" and $2.44 billion of "Adjusted Net Income."



"We're very pleased to have grown revenue 35 percent and to have generated $9.1 billion in cash in fiscal 2008," said Peter Oppenheimer, Apple's CFO. "Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter. We are providing a wide range for our guidance, targeting revenue of $9.0 to $10.0 billion and earnings per diluted share between $1.06 and $1.35."



Apple will conduct its Q4 2008 financial results conference call in about 30 minutes -- AppleInsider will provide full coverage.



Additional Coverage



Steve Jobs on Apple's cash, NetBooks, Apple TV, and Cheap PCs

Notes of interest for Apple's Q4 2008 results call

Apple iPhone 3G sales surpass RIM's Blackberry

iPhone App Store continues to exceed iTunes song sales growth

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Comments

  • Reply 1 of 83
    markbmarkb Posts: 153member
    The margins improved significantly? Love to see if this means CURRENT quarters margins are the ones that are going to take the hit. Is there some other mega-charge other than the new nvidia chipset that was going to nuke margins? Were they supposed to introduce the notebooks several months earlier and thus hit margins last quarter? What were they thinking with last quarters guidance?!?!
  • Reply 2 of 83
    amac4meamac4me Posts: 282member
    Nice quarter. Apple continues to chalk up switchers
  • Reply 3 of 83
    Now, watch the stock plummet.
  • Reply 4 of 83
    backtomacbacktomac Posts: 4,579member
    It'll be interesting to see the reaction on wall street tomorrow.



    On the surface Apple beat the numbers. But I suspect that had a lot to do with how they are booking iPhone revenue.



    Mac sales were below most analyst's estimates and revenue was below most analyst's estimates. While the numbers are good, investors may have expected even better.



    I wonder how APPL is doing in after hour trading?
  • Reply 5 of 83
    markbmarkb Posts: 153member
    with the forward guidance they have given, I cant see how it can do anything but plumet. Even with a day where they were whacked for 7%. I wouldnt be shocked to see another 4-5%, and trust me, i dont want to see my share drop that much more
  • Reply 6 of 83
    Apple's stock is halted and starts trading again at 5:10 PM. I'm scared!!



    I have to also say that I keep buying on dips. Since, I'm holding for the long term, I'm not too worried. Apple's stock has been absolutely crushed over the past month, and I'm sure when the broader economy recovers, Apple's stock will go way up. I guess it's just a matter of positive thinking and holding for the long term.
  • Reply 7 of 83
    "And $25 billion of cash safely in the bank with zero debt.?





    Today, you have to ask "Which bank?"
  • Reply 8 of 83
    parkyparky Posts: 383member
    Quote:
    Originally Posted by backtomac View Post


    It'll be interesting to see the reaction on wall street tomorrow.



    On the surface Apple beat the numbers. But I suspect that had a lot to do with how they are booking iPhone revenue.



    Mac sales were below most analyst's estimates and revenue was below most analyst's estimates. While the numbers are good, investors may have expected even better.



    I wonder how APPL is doing in after hour trading?



    Apple beat the numbers DESPITE the way they account for the iPhone and Apple TV.

    They take the revenue for both over 24 months which means they have only reported 3 months of revenue for the 6 million phone sold in the quarter. The rest will be taken over the next 21 months and will provide a constant revenue stream regardless of how many phones they sell over that period.
  • Reply 9 of 83
    walshbjwalshbj Posts: 864member
    Quote:
    Originally Posted by backtomac View Post


    It'll be interesting to see the reaction on wall street tomorrow.



    On the surface Apple beat the numbers. But I suspect that had a lot to do with how they are booking iPhone revenue.



    Mac sales were below most analyst's estimates and revenue was below most analyst's estimates. While the numbers are good, investors may have expected even better.



    I wonder how APPL is doing in after hour trading?



    up 2% at the beginning of the call.



    points of interest:

    selling more ipods than any other non-holiday quarter. That's big, everyone has been making noise about iPhone eating into ipod sales.



    Biggest non-holiday quarter ever? Nice.



    Stupid as the analyst-system can be, you get dinged when you don't meet their expectations. You have to believe that those expectations are responsible for part of the share price at any point in time.



    backtomac: I think you need to provide more info on what you mean about the iphone numbers - otherwise you don't really have much of a point there.
  • Reply 10 of 83
    satchmosatchmo Posts: 2,699member
    Quote:
    Originally Posted by alphajack7 View Post


    "And $25 billion of cash safely in the bank with zero debt.?





    Today, you have to ask "Which bank?"



    In Steve's private bunker.
  • Reply 11 of 83
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by parky View Post


    Apple beat the numbers DESPITE the way they account for the iPhone and Apple TV.

    They take the revenue for both over 24 months which means they have only reported 3 months of revenue for the 6 million phone sold in the quarter. The rest will be taken over the next 21 months and will provide a constant revenue stream regardless of how many phones they sell over that period.



    Yes but they deferred revenue from the 1st gen iPhone and isn't this the quarter when they start to book it?
  • Reply 12 of 83
    FABULOUS numbers!! Will add more AAPL to my position.
  • Reply 13 of 83
    walshbjwalshbj Posts: 864member
    Quote:
    Originally Posted by backtomac View Post


    Yes but they deferred revenue from the 1st gen iPhone and isn't this the quarter when they start to book it?



    They're selling a lot more iPhones now than they were then. I think that erases the point you're trying to make.
  • Reply 14 of 83
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by walshbj View Post




    backtomac: I think you need to provide more info on what you mean about the iphone numbers - otherwise you don't really have much of a point there.



    The revenue was below estimates but EPS beat estimates.



    Apple have deferred earnings from the sales of the 1st iPhones that I suspect they are now booking.



    I don't know this for a fact but am suggesting this to be the case.
  • Reply 15 of 83
    backtomacbacktomac Posts: 4,579member
    Quote:
    Originally Posted by walshbj View Post


    They're selling a lot more iPhones now than they were then. I think that erases the point you're trying to make.



    No it doesn't.
  • Reply 16 of 83
    johnqhjohnqh Posts: 242member
    Quote:
    Originally Posted by backtomac View Post


    Yes but they deferred revenue from the 1st gen iPhone and isn't this the quarter when they start to book it?



    no, they book 1/24th every months since they were sold.
  • Reply 17 of 83
    parkyparky Posts: 383member
    Quote:
    Originally Posted by backtomac View Post


    The revenue was below estimates but EPS beat estimates.



    Apple have deferred earnings from the sales of the 1st iPhones that I suspect they are now booking.



    I don't know this for a fact but am suggesting this to be the case.



    Yes they are taking revenue from every iPhone they have sold so far, so each month they will take more and more as they sell more and more phone. If they have sold 10 million iPhones then they are taking revenue from ALL 10 million right now, but only one 24th. In 3 months time they will be taking revenue from approx 14 million iPhones and it will be an ever increasing number, even when the first phones pass the 24 months.
  • Reply 18 of 83
    Quote:
    Originally Posted by walshbj View Post


    selling more ipods than any other non-holiday quarter. That's big, everyone has been making noise about iPhone eating into ipod sales.



    Also consider that with almost 7mil iphones sold, one can look at it as Apple selling 18mil ipods for the quarter, further entrenching the ipod and iTMS in the market.
  • Reply 19 of 83
    parkyparky Posts: 383member
    Quote:
    Originally Posted by backtomac View Post


    No it doesn't.



    Actually it does. I'm an accountant.
  • Reply 20 of 83
    johnqhjohnqh Posts: 242member
    Let's use some concrete numbers.



    Let's say Apple sold 4M iPhones before this quater, and 6M this quater(2M/mo). - I use 6M for ease of calculation, the result is not that far different.



    they would book equivalent of

    (4M / 24 * 3) + (2M / 24 * 3) + (2M/24 * 2) + (2M/24 * 1) = 1M, despite having sold 6M units.
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