Apple Q4 05 earnings report: best quarter & best year in company history

Apple has released their fourth quarter 2005 (Q4 05) earnings report. The consensus of analysts surveyed by Thompson/First Call before Apple’s earnings release expected Apple (AAPL) to earn $0.36 per share on revenue of $3.74 billion. In the year ago quarter, Q4 04, Apple earned $0.14 per share on revenue of $2.35 billion and shipped 836,000 Macintosh units and 2,016,000 iPod units. In the last completed quarter, Q3 05, Apple earned $0.37 per share on revenue of $3.52 billion and shipped 1,182,000 Macintosh units and 6,155,000 iPod units.

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. Apple posted revenue of $3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share. These results compare to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter. Gross margin was 28.1 percent, up from 27.0 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

Earnings per share benefited by $.12 from several tax items related to net deferred tax assets, tax reserves, and a revision to the full year tax rate estimated in prior quarters.

Apple shipped 1,236,000 Macintosh units and 6,451,000 iPods during the quarter, representing 48 percent growth in Macs and 220 percent growth in iPods over the year-ago quarter.

For fiscal 2005, the Company generated revenue of $13.93 billion and a net profit of $1.335 billion, reflecting annual growth of 68 percent and 384 percent, respectively, and representing the highest annual revenue and net profit in the Company’s history.

“We’re thrilled to have concluded the best year in Apple’s history, with 68 percent year-over-year revenue growth and 384 percent net profit growth,” said Steve Jobs, Apple’s CEO in the press release. “This is the direct result of our focus on innovation and the immense talent and creativity at Apple. We could not be more excited about the new products we’re working on for 2006.”

“We’re very pleased to report 48 percent year-over-year growth in Mac shipments in Q4, as well as our 10th consecutive quarter of record iPod sales,” said Peter Oppenheimer, Apple’s CFO in the press release. “Looking ahead to the first quarter of fiscal 2006 which will span 14 weeks, we expect revenue of about $4.7 billion. We expect GAAP earnings per diluted share of about $.46, including an estimated $.03 per share expense impact from non-cash share-based compensation, translating to non-GAAP EPS of about $.49.”

Apple will provide live streaming of its Q4 2005 financial results conference call utilizing QuickTime, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on Tuesday, October 11, 2005 at http://www.apple.com/quicktime/qtv/earningsq405/ and will also be available for replay.
Pretty good news. iPod shipments will be perceived as on the light side as Street was looking for 6.75 – 8.5 million iPod units this quarter. Excluding the 12-cents-a-share tax benefit, the company earned $0.38 cents a share to beat estimates of analysts surveyed by Thomson First Call, who forecast a profit of $0.37 cents a share. However, Apple’s revenue of $3.68 billion did not meet analysts’ $3.74 billion consensus estimate. Expect Apple’s share price to correct over the near term.

Related articles:
Apple shares plummet in after-hours trading – October 11, 2005

27 Comments

  1. Yep. AAPL is down about 10% in after hours trading on the news that iPod sales growth was much lighter than expected.

    On the bright side, Enderle was proven dead yet again wrong today (as usual) as Mac sales were up 4.6% over the June quarter. So much for the demand for Macs “dropping like a rock” eh?

    I expect a full MDN article slamming Enderle’s so called prediction post haste!

  2. Lies, damned lies, and statistics.

    There’s something VERY wrong with those numbers, don’t you think? Do you see it, too? It’s so obvious. Rob Enderle says Apple’s Mac sales are supposed to be going down, and according to Apple’s numbers, they’re not. Now, either Rob doesn’t know what he’s talking/writing about, or, Apple’s in big trouble with the SEC for publishing ficticious earnings report.

    Hmmm. Someone is lying. Someone is mistaken. Enderle? Apple?

    Never mind.

    Bambi Hambi
    Mac360

    MDN’s magic word is “more” as in, bring it on!

  3. Good news for Macs. Not excellent for iPods. Starting to plateau? Time to put a new twist on the iPod, perhaps? Just something to keep it spinning…

    Is there a breakdown by category (DT’s, portables, flash vs HD iPods, iTMS sales, etc.?)

  4. Time to buy, buy, buy!! you know the stocks are going to take a dive by tommorow morning! I mean apple is the only company that I keep up with that once it makes a profit (even the best in it’s history) the stock takes a dive simply amazing!

  5. The stock is going to go down because even though Apple set new records on almost all counts, the market expected even more.

    For those of you whining about missing out on the AAPL train, this is now the time to buy your shares. Get ’em while the market overreacts while underplaying the positive news!

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