“This will come as no big shock to some of you. I’ve been pretty hard on Apple (Nasdaq: AAPL). As recently as yesterday, I suggested that the firm might not live up to its skyrocketing stock price. You can read the full argument here. Then you can ignore most of it. Apple smacked the ball out of the park with yesterday’s earnings release, and let me be the first to say that I was way wrong about a few things,” Seth Jayson writes for The Motley Fool. “Of course, when you talk smack, sometimes you get smacked back. Like now. Mmmmm… crow.”
Jayson writes, “Last night’s results may just dull my skepticism for good. Apple sold a ton of computers and about a zillion iPods. (Actually, only 4.6 million, but that’s almost a zillion.) If it continues to fly off the shelves, the music player will certainly eclipse CPUs as a revenue generator next quarter. Here’s better news. The long-hoped-for increase in computer sales finally materialized. The firm moved 26% more computers than last year. That’s a major improvement, and it’s vitally important. Those of you who read the 10K know that computers offer better margins. What’s not so expressly stated is that CPUs are a much better vehicle for creating long-term Mac zealots than iPods alone. Big increases on this line not only help the bottom line, they also ensure a steadier stream of future revenues.”
Jayson writes, “By far, the best bits are in the margins: The gross improved nearly two points, reversing the three-year downward trend I discussed yesterday, and setting the stage for a much more profitable earnings machine. SG&A dropped 3.5% as a portion of sales, helping net margins soar to 8.5%. That makes Apple more profitable than Dell (Nasdaq: DELL), for the time being. Absolutely amazing. Time for me to think different… For now, even this critic is a believer. If Apple can continue to do this voodoo, I might just have to pick up a few shares myself. If you bought this stock at $20, $40, or $60, congrats.”
Full article here.
MacDailyNews Take: Welcome to reality, Mr. Jayson.
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