Apple earnings set new record; shares explode in after-hours trading
So much for expectations. Apple (AAPL) blew past them all — its own and those of a crowd of increasingly bullish analysts — by reporting its most profitable quarter ever, earning $1.82 a share on revenue of $9.87 billion for the fourth fiscal quarter of 2009.
The Street was expecting quarterly earnings of $1.42 on revenue of $9.2 billion, according to Thomson Financial.
Apple's shares exploded in after-hours trading. Having closed at $189.86, shares leaped more than 13 points in the next hour and 40 minutes to $202.87 — one thin dime away from the all-time high of $202.97 set in intraday trading on Dec. 27, 2007.
Sales for the year were a record $36.5 billion, up 12.5% from 2008. Earnings per share for the year topped $6.29, up more than 17% from the year before.
Strong sale of iPhones — following price cuts and the introduction of a new model — helped boost Apple's earnings.
But the big surprise was the Macintosh. Apple sold 3.05 million Macs for in Q4 — a 17% increase from same quarter last year — thanks to its new Snow Leopard operating system, re-energized back-to-school sales and a big order from the state of Maine.
"We are thrilled to have sold more Macs and iPhones than in any previous quarter," said Steve Jobs in a prepared statement."
Highlights from Apple's earnings report include:
- Mac sales: 3.05 million units, up 17.3% year over year
- iPhone sales: 7.4 million units, up 41% from last year
- iPod sales: 10.2 million, down from just over 11 million a year ago
- iPod touch sales were up 100% from last year
- Gross margin: 36.3%, up from 34.7% last year
- Cash: $34 billion, up $2.9 billion from $31.1 billion last quarter
- Guidance for the December quarter: revenue between $11.3 and $11.6 billion, EPS between $1.70 and $1.78, gross margin 34%
Apple's press release is available here.
A replay of the conference call will be available for the next two weeks, starting at 5 p.m. PDT. The instructions are here. Seeking Alpha has published a transcript here.
See also:
- The Street awaits Apple's earnings
- Retail data show Mac sales up 13%
- Will iPhone sales disappoint investors?
[Follow Philip Elmer-DeWitt on Twitter @philiped]
Well, whose going to be the first to say it? I will – Laptop Hunters was an abject failure. While Microsoft was preaching to the choir about Windows PC's being cheaper, Apple was seeing sales of the most expensive machines in the industry increase by 17% in the middle of the deepest recession in decades.
@David Emery – no, I would not categorize the Xbox as an "unqualified" success. The qualification is this: Microsoft was big enough absorb the cost of continuing to throw money at the project when warranty claims were going through the roof. Now that they appear to have gotten a handle on their manufacturing and quality control issues, they can trumpet the Xbox as a success. But initially the Xbox was following the pattern of most of their other consumer hardware initiatives – toilet fodder.
Personally, the most impressive part of the earnings was the Mac side of the story, where growth is outpacing the rest of the market handily 17% to 2%.
Plus, when you understand how much of that growth is coming from Portables, you understand why the Tablet is inevitable, something that I blogged about in:
The Right Stuff: Analysis of Apple’s Q4 Earnings Call
http://bit.ly/RJAPA
Check it out, if interested.
Mark
The issue of the iTablet needs to be considered seriously. It will attract Dell, HP, and other PC lovers a platform that will replace books and still have Microsoft products. The wave, once started will be too big and fast to catch.
Dr. Lewis
University of Colorado Colorado Springs, Computer Science
http://www.rorylewis.com/docs/02iPhone/10_iTablet/10_iTablet.htm
@David in Dallas, I had the recollection that Oppenheimer said that they had until 1stQ of 2011 to implement the new accounting treatment, and that they had not yet decided on how to implement it. I think the sticking point is that Apple will continue to have some deferred revenues, but how much is not yet decided. Something to more accurately reflect ongoing Mobile OS X development costs, which amortized would be alot less than what is currently being amortized.
PS. Honestly, I did not buy those 50,000 Macs!
One other thing that I would point out that isn't reflected in PED's take is that Cook danced around the issue of what increased air freight costs next quarter would be for. It's atypical, I think he said it was atypical, and not just a seasonal increase due to the Xmas holiday. It sure sounded like the was referring to the iTablet.
Hi Philip, The high afterhours I believe was $204.85 although ameritrade currently has incorrect data as well.
Cheers
The big increase in Mac sales is significant:
1. It justifies my anecdotal history about friends buying Macs 
2. It correlates to the increased market share particularly for higher end computers.
3. It's good news for AAPL investors since that market share has higher profit margins.
4. And back to my anecdotal observations: It shows -continuing doubt- about Microsoft, including the Windows 7 roll-out. Unless Windows 7 is a totally unprecedented* success for Microsoft, I suspect a lot of people, when faced with the choice of upgrading an existing machine for WIn7 or buying a Mac, will continue to choose the latter.
* What precedent does Microsoft have in this decade for an 'unqualified success'? XBox, maybe?
@david.
They will HAVE to do it for 2011 but they basically said that they will consider doing it sometime in 2010 but they don't have to.
This is beautiful. It seems like i will be making another killing shorting apple stock again. I can see this stock going to 250 or maybe 300 by the end of the year and then it will to find a brokerage house willing to let me hold some shares, just like i did last time the stock hit 202. making money off itards is great.
PED, do you have any insights on whether Apple applied the revised GAAP in their report this quarter or how that will look whenever they finally do? I'm curious to better understand the implication of the subsidy payouts over time, etc. Might make a worthwhile article. (hint, hint)
ex ped: Not this quarter. Peter Oppenheimer was asked about their future plans, but he sort of ducked the question. I'll have to study the transcript to see if I can make sense of what he said.
@Philip Elmer-DeWitt
I told you so!!! ALL of the negativity was most probably from short traders trying to manipulate the share price of Apple stock down. Short term, it worked slightly because of the "girly people, hedge funds and other weak knee sellers. Where are the nay sayers and traders now now? Climb back in if you can. Crow-Crow-Crow!!
This just proves analysts are just clueless on this company.
I'm not sure why anyone listens to them anymore. They really just should stop reporting on Apple because every time Apple just destroys them…which makes me wonder if the analysts are trying to tank the stock to buy it.
For all those who said that buying apple last year was a mistake – http://www.savingtoinvest.com/2008/07/did-i-buy-apple-to-late-2k-loss-to-date.html – I can say : "I told you so!"
I think this is great news for Microsoft. With Thursday launch of Windows 7 is well-timed to capitalize on this demand. http://bit.ly/vzWqh