Apple posts $1.58B profit, buys monocle, top hat

Well, the holidays were pretty happy down Cupertino way this year -- Apple just posted its Q108 financials and they're impressive. Spurred by sales of 2.3 million iPhones, 22 million iPods, and 2.3 million Macs, Steve and the boys raked in $9.6 billion in total revenue, which translates to $1.58 billion in pure, glorious profit. That represents Apple's latest best quarter ever, with a 35 percent jump in revenue year-over-year -- a $2.5 billion increase from last December. The $1.76 profit per share also beat consensus analyst estimates of $1.63 a share, and, as Piper Jaffray's Gene Munster pointed out in his notes, Mac sales have increased 43 percent since last year. All in all, quite a quarter for a fruit company -- we'll let you know what else we find out during the conference call later today.

[Kiwi616 @ Jan 22nd 2008 4:56PM]

See what happens when you quit being so selfish and start realizing people still need Windows on the computers....

NOW release the iPhone into the wild and see what happens.

[Wei @ Jan 22nd 2008 5:38PM]

How can they post Q108 profits if Q108 isn't over yet?

[Bender Bending Rodriguez @ Jan 22nd 2008 5:42PM]

@ Wel,

Apple, like many companies, start their business year October 1st. Since the holiday season usually makes this quarter the most profitable for companies it's a way to start the financial year out on a positive note.

(That is the simple answer)

[Ireland @ Jan 22nd 2008 6:55PM]

Strange comment Kiwi.

[Don Rober @ Jan 22nd 2008 4:57PM]

Odd, shares closed down -$5.72 today and about $155.74 still a steal from the target $215 for the year. I believe it will take the market 48 hours to digest the financials, but despite the recession woes, I don't think there is any other way for AAPL but to go up.

[dM @ Jan 22nd 2008 5:00PM]

Google Finance shows it down a further $15 to $140 in afterhours trading. I wonder what the delay there is. I wonder if that signals people betting against apple's earnings and losing or what?

[TJ @ Jan 22nd 2008 5:04PM]

And yet take a look at their after hour numbers,http://moneycentral.msn.com/detail/stock_quote?ipage=qdp&Symbol=AAPL, as of right now down another 15+ points or 10% in value. Looks like the market was expecting them to blow through their numbers even more than they did. Although things are a little askew right now.

[thecatt @ Jan 22nd 2008 5:05PM]

Given their forecasts for next quarter, I doubt there is much up.

[CraigJ @ Jan 22nd 2008 5:06PM]

The market expected on average 1.62 EPS, Apple posted 1.76 EPS. Really, this makes no sense to me...

[Don Rober @ Jan 22nd 2008 5:07PM]

I think is the unloading of a lot of folks that shorted the stock the days before the announcements, and haven't realized the news. Also it is something of a trend: With the exception of the 2007 iPhone announcement it has become almost a given rule on AAPL to be down almost 9% post-January. There is just too much hype on this stock.

[The Market @ Jan 22nd 2008 5:18PM]

Where is my God Damn 3G iPhone?!

[Lucas Cantor @ Jan 22nd 2008 5:25PM]

And AAPL is already dipping below 140 a share in after hours...

[ukickmydog @ Jan 22nd 2008 5:29PM]

credit crunch FTW!!!

[IndiaTech @ Jan 22nd 2008 5:29PM]

Hmm... Because the markets are down. American markets have lost about 1 to 2% today. Asian markets were down 5 to 7% yesterday. Europe is also down.
Look at it this way. There is a fire sale. You cannot have ANY item in your store without a discount, how much ever good it might be. EVERYTHING has to go.

[Crayola @ Jan 22nd 2008 5:33PM]

No other way but up? Hmmm.... Really doubt so, a hefty 60% of Apple's revenue (SEC form 10-K) came from US consumers, guess what, hello?! Recession?! Ever heard of that word? Today's unprecedented action by the Fed shows what deep shit US and A is in. And where do you think your iPods, iTouch, Mac Book, Mac Pro, iMac, Mac mini, xServe, apple TV is made? Fcuk Me! I rather buy a few guns, go shoot bambi, maybe donate the rest to Ron Paul's campaign.

Also that MacBook Air, stylish indeed, for posers that is, I would definitely count this as a discretionary purchase. Hmmm... Any luck with the iPhone? Apparently sale ain't that hot in Euroland, guess those Eurothrash just ain't clued up as to how very 'boom' 'boom' this is.

[Jeff @ Jan 22nd 2008 5:43PM]

You guys aren't getting how the market works...

"Target price" means nothing. Nothing's a bargain in relation to its target price. That's an arbitrary number that some analyst somewhere arrived at.

P/E ratio means something. Apple's P/E is 39.59, which is actually not ridiculous for a tech company but is still well over the S&P 500 historical average of about 15. So Apple is not a "bargain" unless you think it's going to continue experiencing explosive growth - otherwise you're paying $40 for every dollar of earnings, which is not a very good deal.

Also, with a company like Apple, people *expect* them to blow past guidance. They do it every quarter. Probably the next six quarters are already priced into the stock and every one of them is expected to be better than guidance. If Apple ever came in *at* guidance, you would see the stock get absolutely *hammered*. Because that would mean the company did worse than investors had expected when they originally bought the stock. Everyone's expecting explosive growth out of Apple.

So if you bought at 170, I hate to tell you but you bought high. The stock will eventually get back up there, assuming Apple continues to do well, but this is not a "bargain".

Here's a little tip: no company with the amount of hype surrounding it that Apple has is *ever* a "bargain". You honestly think you're the only person following Apple? You think other investors have never heard of them? Institutional investors spend *billions* on companies like Apple, and they've got huge research teams working to find the best deals on stocks. Apple is not somehow flying under the radar here. The stock is priced where it should be priced.

Sorry to burst your bubble.

(Kind of an apt pun, I guess.)

[Don Rober @ Jan 22nd 2008 5:46PM]

If we were in a recession and discretionary purchases were down, why this has been a record quarter, ever? What has changed from November to January? Is inflation up? No. Is consumer confidence index (the single economic measure that we would need to be looking at here) down? No. Are AAPL fundamentals bleak? No. Is the future forecast of the company conservative? Yes. It should be. That always has an impact on stock because some translate conservative as bad forecast.

[Izzy @ Jan 22nd 2008 6:02PM]

The stock dropped because analysts were predicting a much higher return per share.

[Darnell @ Jan 22nd 2008 6:38PM]

Sorry I thought this was Engadget not Wall Street Journal.

[Blaktornado @ Jan 22nd 2008 6:39PM]

@ Crayola: "Hmmm... Any luck with the iPhone? Apparently sale ain't that hot in Euroland, guess those Eurothrash just ain't clued up as to how very 'boom' 'boom' this is."

I live in [a part of] "Euroland" and trust me, there are SO many people that WANT iPhones. They just can't justify the tariffs. £35+ a month? £420+ a year? £840+ per two years? That's just ridiculous. I would NEVER justify paying that much for a phone, whether or not it had an Apple on it - which is why I shall invest in an iPod Touch and keep my Samsung phone instead. Who cares about one device when I can have two for much less than the price of one?
The only two iPhones I've seen in the flesh were owned by my Math teacher and some guy in a rich village I visited once. That's all. We just can't afford them - even if we DO want them. Or maybe some of us just know how to use money more wisely than our Western sibling? - after all, we're the ones with a currency worth twice as much as yours :P

[nikster @ Jan 22nd 2008 7:46PM]

The only negative I can see is 2.5M iPhones. I have an iPhone, it's a blowaway product, everyone who's seen it wants it - they should have sold 5 or 6M of this by now. They have been limited by their locking+revenue sharing strategy here. I hope Apple learns from this and in the future just sells their gadgets to whoever wants to buy them - e.g. most of the world, you can't even buy an iPhone from Apple. Because they haven't struck a deal with local carriers yet.

All else is impressive, Mac unit growth tells me that the hammering of AAPL after hours is a typical panic reaction to what I don't know. Perhaps just "buy on rumor, sell on facts"?

[Monochromaddict @ Jan 22nd 2008 10:45PM]

@nikster
That's how many iPhones they sold in 1 quarter not total. The total amount sold that was reported at Macworld was over 4 million.

[icfleming @ Jan 22nd 2008 11:04PM]

Since the iPod and iTunes consist of 50% of Apple, year over year growth of 5% is horrible. Apple likes can claim that the Touch is going to be the greatest thing ever, but the numbers don't lie. 5% growth for 50% of your company doesn't warrant a P/E of 40.

Anyone who thinks the stock should go up because of the last quarter shouldn't be investing in stocks which are based on future earnings.

[CharlieX @ Jan 22nd 2008 4:59PM]

That's impressive for any company. 35% increase. holy shatz. Too bad the rest of the economy is sucking pickled pig dingle right now.

[derX @ Jan 22nd 2008 5:15PM]

"...the economy is sucking *pickled pig dingle right now*" = xDDDD

That was hilarious.

---------
If Apple was able to do that well, for our economy's sake, Steve Jobs for president, perhaps?

Hrm, not needed. I heard he was just going to update all the Apple products at once--free of charge, this time--to enable iNdepence, which is a bit of a misnomer as it will be step one in Apple's quest for global domination.

[Flashpoint @ Jan 22nd 2008 5:01PM]

They are basically running unchallenged. MS can't get their shit together with Zune and the iPhone is currently the supposed top of the heap luxury fashion item.

As much as I hate Apple, their Iphone and Ipod touch makes me want to buy in (but that isn't gonna happen).

[Flashpoint @ Jan 22nd 2008 5:21PM]

God Forbid Steve Jobs ever became president...

Everything would be solid colors and covered in transluscent glaze, everything would be proprietary, there would be no fun games to play, and the Sun would be changed to a spinning rainbow thingy.

[rndmnme @ Jan 22nd 2008 6:32PM]

If Steve Jobs became president?

Personally, I'm all against a cult run country.

Otherwise known as Communism.

[CUBSWILLWIN @ Jan 22nd 2008 5:02PM]

I'll star it the conversation...
Mac is greatblahblahblahblah iphone awesomeblahblahblah

[Luigi193 @ Jan 22nd 2008 5:06PM]

Your an idiot blahblahblah

[Reader @ Jan 22nd 2008 6:21PM]

Proper grammar isn't necessary when posting a comment on a blog *except* when insulting someone's intelligence. Hint hint...

[THJ @ Jan 22nd 2008 5:06PM]

Whoa, Stock down to 140ish right now.

I'm sooooooooo glad I didn't break my stock market cherry with my christmas bonus and APPL @ 200ish.

[nd @ Jan 22nd 2008 5:08PM]

congrats appl.

[Neebs @ Jan 22nd 2008 7:02PM]

Please tell me you didn't abbreviate "apple" with five characters.

[Andrew @ Jan 22nd 2008 7:44PM]

But that's the American way.

[roole @ Jan 22nd 2008 8:53PM]

I think he was trying to sound, you know, "Wall Street"-y and savvy, with a reference to 'aapl'. He ended up with a typo.

[Phineas J. Whoopie @ Jan 22nd 2008 5:15PM]

Their stock is down because of their forward guidance.

"Apple disappoints -- The iPod and iPhone maker reported better than expected sales and profits but stock plummets on weak guidance for its next quarter..."

"For its second quarter, Apple expects earnings of about 94 cents per share on about $6.8 billion in revenue. Analysts expected earnings of $1.09 per share on revenue of $6.98 billion."

http://money.cnn.com/2008/01/22/news/companies/aapl_apple_earnings.ap/index.htm

[Kris @ Jan 22nd 2008 5:26PM]

In case noone ever noticed, Apple always gives conservative guidance. More often than not, they also fall after giving their quarterly results (even if they are great). The level it is going down suggests to me that recession fears are coming into play. Maybe I'll buy an option tomorrow.

[nikster @ Jan 22nd 2008 7:56PM]

Tomorrow is shopping day.. a fire sale is on, I won't miss it this time.

[Kamal @ Jan 22nd 2008 5:23PM]

Not surprising since they pretty much markup everything at least a 100%.

[csjk789 @ Jan 22nd 2008 5:27PM]

Unlike Dell, who only marks up about 30%, Apple has a right to - their stuff actually works, and it works well.

[shervin2 @ Jan 22nd 2008 10:55PM]

You got to remember, Dell has extremely improved themselves over the past three years, but Apple needs to mark it up because their warranty/advertising/everything about them costs money.

[Tony @ Jan 22nd 2008 6:28PM]

So long as you pay $20 for your updates that is.

[Shmapple @ Jan 22nd 2008 11:40PM]

@ csjk789

That's what my friend told me. I kid you not, within the next 30 minutes, his iPhone's SMS didn't work (because firmware 1.13 screwed it up), his MacBook didn't work (with Netflix, and my NAS's control panel).

[csjk789 @ Jan 22nd 2008 5:26PM]

I envision a world wherein everyone uses macs and pcs are broken down to create alternative fuels.

[Nathan @ Jan 22nd 2008 6:29PM]

A Mac IS a PC, regardless of what Apple's marketing department says in their commercials. It has all the same components of a Windows, Unix or Linux machine it just has a different OS. It has the same processor and HDD, optical drive, video card, sounds output methods...for shite's sake, it will even run Windows if you so choose!

How can Apple fan boys think that they are somehow using something besides a personal computer to brows the tubes?

[Teetdogs @ Jan 22nd 2008 6:55PM]

@nathan

Thank you thank you thanks I have been saying this FOREVER and nobody seems to listen, that why I hate those stupid mac vs pc adds it should be Windows vs OS X but that doesn't sound condecending enough.

[Csjk789 @ Jan 22nd 2008 7:11PM]

I'm well aware. Have you any substantive argument or did you just want to point out a common error that most wouldn't even pick up?

[Artaxiad @ Jan 22nd 2008 11:57PM]

Holy dystopia!

No thanks; I actually enjoy having control over my components and, you know, free will.

[Eric @ Jan 23rd 2008 10:50AM]

No duh, Sherlock. Well, a Mac is a PC with a specific hardware set that makes it much easier to tune the hardware for the OS. Windows works on a Mac so well because there's ONE SINGLE SET of drivers that makes it work - well, a set for each specific version of Windows that runs in Boot camp. (Even 64 bit Vista now).

As for the Mac vs PC ads, did Teetdogs notice that many of them do make it WIndows vs OS X. Or is he so blind that he can't see?

Such lame arguments as this only show one thing. People don't get it. It's about the software! The OS! Just like you can take a Brillo pad, a few ounces of TNT and some detergent and blow up a house (read: Inside Delta Force), the same with making a piece of crap computer, or a great one with just the right combination of pieces of hardware and software.