Another strong quarter for Apple; credit strong iPhone, Mac sales

Another strong quarter for Apple; credit strong iPhone, Mac sales

Summary: updated: Apple said today that Mac computers and iPhones saw strong year-over-year sales jumps in the fourth quarter, allowing the company to once again beat Wall Street's expectations for the quarter and sending the stock surging in after-hours trading.Apple today reported fourth quarter earnings of $1.

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updated: Apple said today that Mac computers and iPhones saw strong year-over-year sales jumps in the fourth quarter, allowing the company to once again beat Wall Street's expectations for the quarter and sending the stock surging in after-hours trading.

Apple today reported fourth quarter earnings of $1.67 billion, or $1.82 per share, on sales of $9.87 billion, up from $7.9 billion in the year ago quarter. Wall Street analysts had been expecting an eps of $1.42 on revenue of $9.2 billion. (Statement, Techmeme)

For the fiscal year, the company reported earnings of $5.7 billion, or $6.29 per share, on sales of 36.5 billion, up from $32.5 billion last year. In a statement Apple CFO Peter Oppenheimer said:

We are delighted with our September quarter and fiscal 2009 results. For the full year, we grew revenue by 12 percent and net income by 18 percent in extraordinarily challenging times.

Looking forward, Oppenheimer said it expects revenue for Q1 2010 to be between $11.3 billion to $11.6 billion and earnings per share of $1.70 to $1.78.

The fourth quarter was a busy one for Apple. Steve Jobs made his first public public appearance since undergoing a liver transplant during a medical leave of absence earlier this year. Jobs hosted a a September event in San Francisco, where he announced a refresh to the iTunes and the iPod line. During the quarter, the company also released Snow Leopard and plans for the iPhone in China were unveiled as China Unicom said it reached a three-year deal to sell the 3G and 3GS in the country. It also faced Washington regulators in the ongoing questions over the Google Voice app for the iPhone/iPod Touch.

Among the highlights from the quarter:

Mac sales: The company shipped 3.05 million Mac computers, up 17 percent from the year ago quarter. In its third quarter reports, IDC and Gartner showed market share gains for Apple in the U.S., up to 9.4 percent, a year-over-year gain of nearly 12 percent.

iPod: The company sold 10.2 million iPods during the quarter, an eight percent unit drop from a year ago. RBC Capital Markets analyst Mike Abramsky has said in an investor's note that he sees iPods as a shrinking market - despite the addition of one with video recording capabilities - that's being replaced by interest in the iPhone and other smartphones. Analysts had expected sales of 9.9 million iPods.

iPod Touch: The company doesn't break out iPod Touch sales but did say that sales were up 100 percent and that the company anticipates greater growth with the new $199 entry-point price tag.

iPhone: The company sold 7.4 million iPhones in the quarter, a seven percent jump over a year ago. During the quarter, China Unicom announced a three-year deal to sell the iPhone in the planet's most populated country.

Corporate: Google CEO Eric Schmidt resigned from Apple's Board of Directors on concerns that the competitive landscape between the two companies (notably the Android smartphone vs. iPhone and Mac OS X vs, the forthcoming Chrome OS.)

Accounting: During a call with analysts, executives explained changes in accounting rules that will likely benefit Apple as it allows the revenue from iPhones and Apple TV to be recognized immediately, instead of over a 24-month period. Adopted earlier this year, companies have until this time next year to adopt the new accounting processes. Apple said it believes the new rules will allow a better reflection of its performance - and analysts believe the numbers will increase Apple's earnings - but is still looking into how it will transition. It does not yet have a set timeframe for the changover and the forecasts for the next quarter reflect the deferred revenue method.

Shares of Apple were up less than one percent in regular trading, closing at $189.86. Shares were surging in after-hours trading, up more than eight percent.

Topics: iPhone, Apple, Hardware, Mobility, Smartphones

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24 comments
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  • To think this started 8 years ago this week!

    I remember when the pundits were predicting Apple was dead, that
    Sun was going to buy them out. When the iPod came out on Oct. 23rd,
    2001, I was using a Kodak mp3 player and I ordered an iPod for my
    wife for Christmas. When the package arrived and I got my first look
    at it, I knew it would be a big seller but who would've thought that
    220,000,000 of them would be sold!

    It's amazing how the 'iPod halo' effect, along with the smart moves by
    Apple; totally revamping the OS, switching to Intel chips, re-imagining
    the cellphone, have brought them to this point in time where, instead
    of being on the brink of bankruptcy, they are now one of the biggest
    technology companies in the world. An amazing comeback.

    October 24th, 2001. Apple stock price was $9.22 (Microsoft was
    $30.31)
    October 19th, 2009. Apple stock price is $202 in after hours trading
    (Microsoft is $26.43)

    ShazAmerica
    • Microsoft has roughly ten times the number of shares outstanding.

      Thus their adjusted share price would be $264/share.

      Apple is on a roll. Keep it up!
      ye
      • I think you're confusing...

        stock price with market capitalization ($price * shares outstanding).

        Microsoft's market cap is about $237b, while Apple's is about $168b.
        msalzberg
        • I'm not confusing anything.

          If Apple's share price reaches $264/share then Apple's market capitalization will be roughly $236B ($264/share * 895.82M shares outstanding). Microsoft's market capitalization is $234B ($26.36/share * 8.91B shares outstanding, or $263/share * 891M shares outstanding).
          ye
          • Frankly a Weird Thread

            Well, sure, but an investor's value of a stock comes from its appreciation
            in per share price and dividends paid.

            Comparison of the dividends paid out may be what you are seeking.
            There was also a Microsoft stock split, but I can't be bothered with
            checking if he chose a date after the split. 2001 for the iPod? I have my
            doubts about that date; cf. can't be bothered to check.

            Really. People crowing about someone else's success. That's silly enough.
            Trying to knock them off their self-constructed papier mache pedestals.
            Egads.
            DannyO_0x98
          • The OP attempted to compare stock price...

            ...of the two companies. $202/share obviously looks better than $26/share. But until the number of shares outstanding is equalized we wouldn't know. It's a lousy way to evaluate a company but you'll have to take that up with the OP.
            ye
          • Nope, OP compared the growth on the price of the shares.

            And it shows really really sad performance of MSFT over the past 8 years
            compared to AAPL. This is exactly HOW you should compare two stocks.

            For those that don't understand that, take it up with "ye" because he
            seems confused.
            Bruizer
          • Bruizer is spot on (nt)

            nt
            Richard Flude
          • He won't like that Bruizer

            Prepare yourself for some ad hominem attacks!
            UsernameRequired
          • @Bruizer: Perhaps.

            If that's what he was trying to do he should have used percentages and not share price.
            ye
      • Point taken. But what I meant was...

        If you had invested $1000 in MS on 8 years ago, you'd now have a
        measly $870

        If you had invested $1000 in Apple, you'd now have $21,900
        ShazAmerica
        • That's what happens when you use selective time frames.

          But you are correct...over the past few years Apple has been a great investment. And I'm a very happy AAPL stock holder because of it.

          The question is...when do I get out? It's my opinion they can't keep this up forever.
          ye
          • It's actually worse...

            if you go back 10 years, which is when I bought Microsoft. Held it for
            two years, sold at a loss.

            As to when to sell; I wish I knew.
            msalzberg
      • This is what MS should do...

        Monkey Boy Ballmer should sell the company and give the cash to the stock holders. Their stock has been a snoozer since 2001.Ballmer is poison to Microsoft's future, a slow agonizing poison. Why hasn't this man been ousted?
        gtdworak
    • It is even sadder than that...

      http://www.nasdaq.com/aspx/chartingbasics.aspx?
      intraday=off&timeframe=8y&charttype=ohlc&splits=off&earnings=off&
      movingaverage=None&lowerstudy=volume&comparison=on&index=&dri
      lldown=off&symbol=AAPL&symbol=MSFT&selected=AAPL

      the short link:
      ttp://tinyurl.com/ygezux9

      I, like you, recognized how the iPod would take off and I am very happy
      about that now-a-days.
      Bruizer
  • Over-reaction of market

    This Apple news will be diluted once Windows7 ships this week. Plus, with the new Zune HD and Windows Mobile 6.5, Apple's days are definitely numbered. Microsoft is poised to take control of all markets once and for all. I would sell AAPL if I were a shareholder and BUY BUY BUY shares of Mr. Softie!!!
    Mike Cox
    • ROFL

      What rock are you living under? Windows Mobile 6.5 is a POINT RELEASE
      of a stupid piece of crap noone wants, even the smartphone
      manufacturers who DO run winmo put their own tweaked interface over
      it just to make it look and work half decent. Windows 7 will be a success
      purely because enterprises cannot stay on XP for ever and MSFT's
      monopolistic OEM & support practices will force it failing that (to be fair,
      it seems a slightly better product than vista was at release). The Zune will
      underwhelm completely, as it has in the past. Wake up, MSFT's days are
      over thanks to the stupid mismanagement of Steve Ballmer, world's
      stupidest CEO.
      theoxygenthief
      • Mike got another one!

        Seriously... you need to read posts here a bit
        more often before posting. You'll find people
        like Mike who love to post ridiculous messages
        in large part to parody fanboys but also to
        coax responses like yours. Then there are
        others who post constant anti-Apple (or anti-MS
        or anti-Linux) bile and spin on an almost daily
        basis.

        You can't take a whole of of what you see
        posted (or blogged) at ZDNet at face value.
        UGottaBKidding
  • No, another RECORD BREAKING quarter

    You guys stick with the 10 headlines about W7 and
    hope for the best.

    The winner is Apple.
    mlindl
  • I pray every day...

    for the health and continued safety of Mr. Steve Balmer.

    As an Apple share holder, there is nothing I want more
    than Mr. Balmer running Microsoft for as long as the Good
    Lord allows. Reminds me of the captain of the Titanic.

    Who else could produce and release such technological
    marvels as Vista, Zune, Windows Mobile, etc.

    Godspeed, Mr. Balmer, Godspeed!!!
    ShazAmerica