Notes from Apple's Q4 '05 conference call

Posted:
in General Discussion edited January 2014
Apple today announced financial results for its fiscal 2005 fourth quarter ended September 24, 2005, reporting the highest revenue and earnings in the company's history.



Some very brief notes from the conference call with analysts and the media follow:



Apple sold 1,236,000 Macs during the quarter.

The company also sold 6,451,000 iPods.

602,000 of the Macs sold were desktop systems while 634,000 were portables.

The average selling price of Apple desktops was down slightly year over year due to lower iMac pricing.

Apple shipped over 1 million nanos in the 17 days that were left in the quarter after the player was announced.

The company ended quarter with "enormous backlog" of the nano and cannot predict when it will be able meet a supply and demand balance on the players.

Apple's iPod nano backlog issues are a result of a component constraint, not manufacturing or product mix (2GB/4GB or B/W issues), the company claims.

Demand for the nano is "staggering" said Apple's only executive vice president, Tim Cook.

The company hinted at forthcoming iPod/Mac announcements.

There are now over 1000 authorized iPod accessories on the market.

15 major car manufacturers are offering iPod integration with their automobiles; about 30% of cars in the US will offer iPod integration in 2006

Tiger revenue for the fourth quarter was in the mid-$35 million dollar range.

Apple retail stores saw 14.8 million visitors during the quarter, which breaks down to 9800 thousand visitors per store, per week.

The company plans to open 35 to 40 new retail stores in fiscal 2006, most of which will be in the U.S.

Apple for the first time confirmed that it is constructing a [mega flagship] store on 5th Ave in Manhattan and would like to see it open by the end of the year.

Apple's education sector sold more Mac systems during the fourth quarter than any other quarter in last 10 years.

Higher eduction Mac unit sales grew 38% year-over-year, thanks largely in part to a better than expected back-to-school buying season.

During the quarter, DRAM and LCD-panel prices were more stable than had been expected. DRAM prices should stay down through the current quarter. Hard drive prices are also expected to decline, but less than historical trends would imply.

Mac channel inventory came in below Apple's 4- to 5-week target as Mac sell-through exceeded expectations.

For its first quarter of 2006, Apple expects $4.7 billion in revenue based on 35 percent year over year growth.

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Comments

  • Reply 1 of 33
    So much for the early rumors that Apple wasn't selling many nanos at all. And that there were an uneven supply/demand of white/black models.
  • Reply 2 of 33
    nagrommenagromme Posts: 2,834member
    ...and that Mac sales were in a slump!



    PS, they said education sales were good. I wonder how edu market share compares to last year? Improving? Or was this a good back-to-school season for Dell too?
  • Reply 3 of 33
    Holy cow! 9800 thousand visitors per store, per week! That's 9.8 million visitors per store, per week. *125. That's... 1,225,000,000. PER WEEK.



    I smell a typo.
  • Reply 4 of 33
    rokrok Posts: 3,519member
    Quote:

    Apple has two businesses: "Mac and Music"



    Apple CFO Peter Oppenheimer



    gosh, wonder if that statement will come up in the lawsuit of apple vs. apple.
  • Reply 5 of 33
    sunilramansunilraman Posts: 8,133member
    (edit: okay, see chart below)
  • Reply 6 of 33
    Has Apple ever sold over a million Macs in any quarter within the last five or so years?
  • Reply 7 of 33
    sunilramansunilraman Posts: 8,133member
    chart here... AAPL Financial Year 2004 and 2005, by Quarter



  • Reply 8 of 33
    sunilramansunilraman Posts: 8,133member
    notice that mac units surpassed 1 million in q1 05 and has held out above 1 million since then. Q4 '05, which was supposed to be "apple is teh intel doomed" quarter, resulted in highest ever mac units sold.



    mac units sold are not that fantastic in growth compared to of course, the ipod, interestingly, the profit line, goes along with the ipod line





    note the steep jump from Q4 '04 to Q1 '05, which shows "christmas frenzy". expect a similar jump next quarter is my guess.



    revenue is roughly over $2 billion per quarter in fy2004 and over $3 billion per quarter in fy2005



    profit is a crappy $100 million or less per quarter in fy2004, jumping to an impressive $300-$400 million per quarter in fy2005. yay!

  • Reply 9 of 33
    sunilramansunilraman Posts: 8,133member
    Originally posted by FireEmblemPride

    Has Apple ever sold over a million Macs in any quarter within the last five or so years?




    yes, apple has consistently sold over 1 million Macs per quarter in the past four quarters.
  • Reply 10 of 33
    sunilramansunilraman Posts: 8,133member




    this 3d graph may show why profit taking happened to push the share price below $47... a cynical view may look at the ipod growth starting to flatten out, with revenue and mac unit sales holding above the $3bil/quarter and 1million units/quarter marks respectively.



    nice profit spike this past financial quarter though, so no surprise, apple is doing very well on the profitability side of things. this suggests that apple has identified and moved strongly on new profit centers, and have enough innovation around to have reasonably steady profit growth beyond iPods, iTMS and Mac units.



    this concludes my patented deckchairAnalysis? tonight. the Sunil Group signing out.



    edit: final thoughts:

    1. ipod "halo effect" : this is possibly contributing to apple holding above 1 million mac units sold per quarter, nicely coming along, albeit, is it growing fast enough for some punters? who knows.

    2. macintel announcement: this has obviously no proven effect on apple revenue, sales, growth, whatever whatever. really, it seems no one gives a flying f**k because apple has posted is greatest ever quarter, when the CFO warned that things would be the same compared to the previous quarter and that they "didn't know" what the effect of the intel announcement would be.
  • Reply 11 of 33
    Somewhere, hidden in the figures, is the fact that selling iPods over $200 will yield as much, if not more, net income than a lot of computer makers get off of they base line PCs. While Apple's "computer" sales are around a million units you can probably add another 4 - 5 million "PC equivalent units" because of the iPod's profitability. Must drive Mike Dell nuts when he thinks about that.
  • Reply 12 of 33
    sunilramansunilraman Posts: 8,133member
    nice one ken. also, let us not forget that apple is selling over 11,000 Macs PER DAY worldwide with virtually ZERO advertising of such mac units. i get a frickin' dell flyer in my newspaper every other day
  • Reply 13 of 33
    jeffdmjeffdm Posts: 12,953member
    Quote:

    Originally posted by kenaustus

    Somewhere, hidden in the figures, is the fact that selling iPods over $200 will yield as much, if not more, net income than a lot of computer makers get off of they base line PCs. While Apple's "computer" sales are around a million units you can probably add another 4 - 5 million "PC equivalent units" because of the iPod's profitability. Must drive Mike Dell nuts when he thinks about that.



    Comparing the profitability of a base model of one product category with with the profitability of a mid range to high-end model of another product category nets no information of value.



    Overall, the PC market has horrendously slim margins, so I'm not really surprised. I am glad I never tried to sell computers as a small business, I think it's an easy and almost guaranteed path to disappointment.
  • Reply 14 of 33
    How much cash do they have on hand now? Apple should use this to buy some software companies such as Avid, Adobe, Auto-desk, and Sonic. Those companies can help apple grow when it comes to sales. Also it would eliminate competitors to their existing product lines making more people buy Apple computers in the long run. I am still waiting for Apple Photoshop, Apple Maya, etc...
  • Reply 15 of 33
    melgrossmelgross Posts: 33,567member
    Quote:

    Originally posted by sunilraman

    nice one ken. also, let us not forget that apple is selling over 11,000 Macs PER DAY worldwide with virtually ZERO advertising of such mac units. i get a frickin' dell flyer in my newspaper every other day



    Actually Apple's computer sales were substantially over 1 million at 1, 236,000 units. That's almost 25% over 1 million. The computer sales were almost 50% higher than last years quarter. Pretty damn good. I don't think that it will grow at that rate next year though. But Apple's prediction for $4.7 billion in sales is about $1.2 billion over that same quarter last year. Substantial.



    If you look at the profit jump, it really shows a correlation with the average of the computer sales and the iPod sales. But what they don't show here (or Sunil doesn't show) is the software sales. Software usually has a much greater margin than hardware and is also responsible for the profit hike.



    I lost a HECK of a lot of money after hours. I just hope that everyone comes back to their senses tomorrow. Apple didn't reach the extreme estimate of 3.76 billion in sales but they did awfully well, and their next quarter estimate is pretty good.



    edit: corrected a number.
  • Reply 16 of 33
    A couple of comments:



    To Rob Enderle regarding tanked Apple hardware sales - suck on those numbers.



    To the few who keep insisting that Apple should drop hardware sales and go software only, $35,000,000 in Tiger sales is nice but just doesn't compare to hardware sales (even without the iPod).
  • Reply 17 of 33
    Quote:

    Originally posted by melgross

    Actually Apple's computer sales were substantially over 1 million at 1, 236,000 units. That's almost 25% over 1 million. The computer sales were almost 50% higher than last years quarter. Pretty damn good. I don't think that it will grow at that rate next year though. But Apple's prediction for $4.7 billion in sales is about $1.2 billion over that same quarter last year. Substantial.



    If you look at the profit jump, it really shows a correlation with the average of the computer sales and the iPod sales. But what they don't show here (or Sunil doesn't show) is the software sales. Software usually has a much greater margin than hardware and is also responsible for the profit hike.



    I lost a HECK of a lot of money after hours. I just hope that everyone comes back to their senses tomorrow. Apple didn't reach the extreme estimate of 3.76 billion in sales but they did awfully well, and their next quarter estimate is pretty good.



    edit: corrected a number.




    fair enough.



    almost 14,000 Macs per day on average for 90 days during july-september 2005



    i've gone back to the mac unit numbers though. each quarter it has grown by

    -5.07%, 7.82%, -2.34%,\t11.16%, 1.13%, 4.97%, 2.23% when compared with the previous quarter (not year-ago quarter)



    these are not fantastic numbers in wall street's opinion but if you compare financial 2005 to financial 2004 the number of mac units sold increased by 15.9% ...again, remember, this is with virtually zero advertising



    yup, those profit centers i mentioned definitely includes software sales. didn't have the energy to include them



    edit: mel, yeah, quite a number of people are pissed off about the after hours drop. but it will pick up, i think we all agree on that. can apple achieve a 15-20% annual growth in mac unit numbers in financial 2006 compared to the previous year? i think it is very possible provided no macintel transition screwups.



    we have to remember though that when looking at mac units sold numbers it is important to consider profit margins. greater units sold at the expense of profit margins may not be so tantalising as more units sold while maintaining margins...
  • Reply 18 of 33
    Quote:

    Originally posted by Carson O'Genic

    A couple of comments:



    To Rob Enderle regarding tanked Apple hardware sales - suck on those numbers.



    To the few who keep insisting that Apple should drop hardware sales and go software only, $35,000,000 in Tiger sales is nice but just doesn't compare to hardware sales (even without the iPod).




    heh. the enderle "group" can go blow me. what a f*kwit.
  • Reply 19 of 33
    melgrossmelgross Posts: 33,567member
    Quote:

    Originally posted by sunilraman

    heh. the enderle "group" can go blow me. what a f*kwit.



    Well, I'm going to be writing to him soon. We have a correspondence going for a couple of years.



    I'll mention your offer, if you like.
  • Reply 20 of 33
    ROFLMAO
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