Earnings
Apple's earnings report will be released later this week. Do you think it will be an improvement over the last? Has substantial R&D put Apple in a financial hole? Have the booming sales of iPods given them a significant boost?
Will Charlie White once again proclaim certain death for Apple based on this week's revelation?
Will Charlie White once again proclaim certain death for Apple based on this week's revelation?
Comments
wonder if the bookies will take that bet?
Apple is spending tons of money on R&D and getting some very good results from it - just look at the last 12-18 months: iTMS, iPod (v2,3,4), iChat AV, iSight, G5, OS X Jaguar, etc etc.
I think the Apple earnings story will begin to materialise in late calendar 2003 or financial year 2004 when G5 R2 is released and (hopefully) a G5 laptop
Edit: Links for this quarter's conference call and general info:
Conference call: http://www.apple.com/quicktime/qtv/earningsq303/
General info:
http://www.apple.com/pr/library/2003...ingsalert.html
Apple shipped 771,000 units in the quarter.
iMac: 287k (last quarter: 256k)
iBook: 190k (last quarter: 133k)
PowerMac G4: 133k (last quarter: 156k)
Powerbook: 161k (last quarter: 166k)
From Maccentral:
Reuters is reporting that Apple will post a $19 million profit or 5 cents a share, down from $32 million, or 9 cents, a year ago. Revenue rose to $ 1.55 billion from $1.43 billion.
I believe the targets were 2-3 cents a share, so easily a couple cents above analyst estimates on both profit/share and revenues.
From CBS Marketwatch:
Apple Q3 income slides 41 percent
By Rex Crum, CBS.MarketWatch.com
Last Update: 4:28 PM ET July 16, 2003
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SAN FRANCISCO (CBS.MW) -- Apple Computer reported third-quarter profits Tuesday that fell 41 percent over a year ago even as shipments of Macintosh computers rose from the prior quarter.
Cupertino, Calif.-based Apple (AAPL: news, chart, profile) reported income of $19 million, or 5 cents a share, down from the $32 million, or 9 cents a share, the company earned in its 2002 third quarter.
Revenue for the period ending June 30 totaled $1.55 billion, up 8 percent from the $1.43 billion in sales it recorded a year ago.
The results beat the consensus estimates of analysts surveyed by Thomson First Call, who forecast a profit of 3 cents a share and sales of $1.49 billion.
Apple said it shipped 770,00 Macintosh computers, its primary revenue source, during the quarter. In the same period a year ago, Apple sold 808,000 Macintoshes, but this year's third-quarter number was up from the 711,000 units it shipped in its 2003 second quarter.
Going forward, Apple CFO Fred Anderson said the company expects to see a slight increase in fourth-quarter profit and revenue over its third-quarter figures.
CUPERTINO, California?July 16, 2003?Apple® today announced financial results for its fiscal 2003 third quarter ended June 28, 2003. For the quarter, the Company posted a net profit of $19 million, or $.05 per diluted share. These results compare to a net profit of $32 million, or $.09 per diluted share, in the year-ago quarter. Revenues for the quarter were $1.545 billion, up 8 percent from the year-ago quarter and up 5 percent sequentially, and gross margins were 27.7 percent, up from 27.4 percent in the year-ago quarter. International sales accounted for 39 percent of the quarter?s revenues.
Apple shipped 771 thousand Macintosh® units during the quarter.
?This was a great new product quarter for Apple, starting with the iTunes Music Store and the new third-generation iPods, and ending with the announcement of the Power Mac G5 and the developer preview of Panther, the fourth major release of Mac OS X,? said Steve Jobs, Apple?s CEO. ?Customer response to our new products has been very strong, and this quarter we are focused on delivering Power Mac G5s beginning in August and finishing Panther for release later this year.?
?We are very proud to have exceeded our revenue target for the third quarter despite the difficult economic backdrop,? said Fred Anderson, Apple?s CFO. ?We continue to be pleased with our working capital management and our ability to increase cash which totals over $4.5 billion. Looking ahead to the fourth quarter of 2003, we expect an increase in revenues and a slight increase in earnings relative to the June quarter.?
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.
Apple will provide live streaming of its Q3 2003 financial results conference call utilizing QuickTime®, Apple?s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:30 p.m. PDT on Wednesday, July 16, 2003 at http://www.apple.com/quicktime/qtv/earningsq303/ and will also be available for replay. The QuickTime player is available free for Macintosh and Windows users at www.apple.com/quicktime.
This press release contains forward-looking statements about future revenues, profit and products. These statements involve risks and uncertainties and actual results may differ. Potential risks and uncertainties include continued competitive pressures in the marketplace; the effect competitive and economic factors and the Company?s reaction to them may have on consumer and business buying decisions with respect to the Company?s products; the ability of the Company to make timely delivery of new programs, products and successful technological innovations to the marketplace; the continued availability of certain components and services essential to the Company?s business currently obtained by the Company from sole or limited sources; possible disruption in commercial activities caused by terrorist activity and armed conflict, such as changes in logistics and security arrangements and reduced end-user purchases relative to expectations; possible disruption in commercial activity as a result of Severe Acute Respiratory Syndrome (SARS); risks associated with the Company?s retail initiative including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships; the effect that the Company?s dependency on manufacturing and logistics services provided by third-parties may have on the quality or quantity of products manufactured; and the ability of the Company to successfully evolve its operating system and attract sufficient Macintosh developers. More information on potential factors that could affect the Company?s financial results is included from time to time in the Company?s public reports filed with the SEC, including the Company?s Form 10-K for the fiscal year 2002 and the Company?s Form 10-Q for the quarter ended June 28, 2003 to be filed with the SEC.
On the other hand, I think the conference call in January will be pretty upbeat.
Next quarter should indeed be pretty lukewarm
Well, Fred Anderson does't agree with that! He's expecting improvements all around - and he's always conservative.
Remember there will be the long waited for 15" Powerbook as well as back to school sales for iBooks (most likely to be bumped up in speed) continued great sales for the iPod - which will be THE tech item for Xmas (especially with broader availability) and continued strength for the iMac. Some intitial sales of the G5 may make the report, especially if they ship next month. Apple is also reported to believe that by September the Apple Stores will finally turn a profit (in total). We'll see!
600,000 new ipods
Retail:
62 stores total. 145,000,000 revenue from stores
average per store: 2.6 million
Traffic in stores: Up, since last year, driven by interest in music
3.1 million visited stores during quarter
50% of customers buying Mac systems in stores did not currently own Mac.
21st day of Michigan avenue ? 100,000th visitor, 18 days ahead of SoHo date for same.
U.S. Education quarter results ? Unit shipments up 5% over year ago quarter.
IDC marketshare down 19% for quarter (projected). Good for Apple.
Portables accounted for 47% of U.S. sales, propelled by larger one for one deployment in many settings.
60 education agents added to Apple staff.
U.S. business strongest. SARS hurt Asia, Europe and Japan weak economic conditions.
Fiscal ytd increase of 208 million of something or other.
June quarter impressive for Apple. iTunes music store, iPod, Final Cut Pro, iChat AV, iSight, preview of Panther. PowerMac G5, of course. ?We believe that the new G5 coupled with the availability of Quark Express 6 are laying the foundation for future growth in PowerMac sales.?
Outlook:
On a sequential basis, we expect a high single-digit percentage increase in revenue, and a slight increase in earnings. We expect a sequential decline in gross margin percent due to lower OS sales, something else. Operating expenses should be about 420 million, including development cost, esp. of Panther. Operating expense should decline to about 10 million due to lower interest rate on investment portfolio.
Question and Answer Session begins.
On a sequential basis, we expect a high single-digit percentage increase in revenue, and a slight increase in earnings. We expect a sequential decline in gross margin percent due to lower OS sales, something else. Operating expenses should be about 420 million, including development cost, esp. of Panther. Operating expense should decline to about 10 million due to lower interest rate on investment portfolio.
Question and Answer Session begins.
Mac OS X sales remain strong in June quarter; new release of FCP contributed significantly to software and other revenue. In retail stores, third party software also did very well.
Total global channel inventory decreased by 11,000 units. ?very comfortable? on G4.
Preorders of G5: ?Strong? customer response. That?s as detailed as it gets.
iTunes: Not saying anything more.
Windows vs. Mac iPods ? don?t have that information.
Started Illinois iBook deployment, some other minor ones.
Profit structure on iTunes music store, when Windows version?
Close to break-even on first quarter of iTunes music store. Windows: ?still on track to be launched before the end of the calendar year?
Powerbook ? 12 inch versus 17 inch sales.
?For competitive reasons? ? can?t give breakdown by mix.
Will Panther support 64 apps?
Yes. It will.
What do you think you could do to get iMac back on track?
Flat-Panel iMac is in sixth quarter, and still performing well. But there?s clearly a shift going on in the marketplace not just for Apple to portables. ?capturing a fairy significant and reasonable marketshare in its price? bracket.
Still ?year of portables? for Apple. Focus of education business, extremely pleased by 5% year over year unit sales growth in education in a very tough funding environment today. Attribute to 1-on-1 initiatives. BUT then you?ve got kind of a macro industry of this phenomenon here ? there is a general movement from portables to desktops?with the size of LCDs in portables today people are buying as replacements for desktops.
iTunes again: How can we factor into expectations? Order of magnitude on iPods?
?Here?s the thing. Clearly we?re addressing a minority part of the market today, with this only being available on the Mac platform. Windows users today cannot access our music store. By the end of the year, because we?re porting iTunes software to Windows?not only can they buy music and albums on iTunes?we think it?ll be a Trojan horse for people buying more on the Windows time of our iPod?.they may the next time beside to buy Mac [computer].? ? ?For competitive reasons, no more information on iTunes profits.?
Clarification of new G5 ? when first shipments, demo units, actual units in stores.
?We expect to begin shipping in the month of August?busy month.?
?Many of the areas that you mentioned we give the first production units off the line to [developers] ? get them first ? then to customers as quickly as we can.?
Quark sales ?
No data available.
Followup on Apple.com ? online sales:
(Direct sales)
Internet direct sales: 42%, up from 36% year before.
G5 ? ?If you go back three years ago ? I believe, fiscal quarter June 2000, about 300,000 PowerMac sales ? I don?t think we?re going to get back to that level. Since then, you?ve had that movement to portables. You now see Apple with this 17 inch PowerBook, that will look very attractive to people in creative professions, and clearly I think the G5 PowerMac is going to rebound ? the question is, how much? I don?t think it will go back to 300,000. Do I think we can get it north of 200,000? Absolutely.?
That's all of it. A few quotes might have some scrambled words because this was transcribed real-time. I might've missed a few tidbits, too.
All in all Apple had a stellar quarter considering the business climate. Fred Anderson was very upbeat... more so then in the past three quarters.
'm so proud - MacNN used some of my transcribed quotes, facts, and figures.
Hopefully they gave you credit, or perhaps a free subscription to their website.... oh, I guess it's free anyway. Congrats.