Apple Financial Results Conference Call Q4-2006 Live Notes (in reverse-chronological order):
End of conference call.
• Apple has about 5,800 retail store employees.
• Apple has a “reasonable handle” on commodity costs.
• Apple will continue to air freight portables this quarter as wella s a portion of iMacs due to strong demand.
• Generally speaking, the economy is slowing due to multiple Fed hikes. Economy appears to be heading for soft landing. Apple agrees with that outlook.
• iTV announced early to give customers an idea of how movies and content will get to large screens in home.
• Apple looks forward to bringing “movies” to international iTunes Store locations in 2007.
• iTunes Store in 21 countries: cover close to 90% of whewre music is legally purchased.
• Apple working with Coke in Europe (UK, Germany) with Coke website linked directly to iTunes: Coke will give away 70 million songs in next few months.
• Are there new Leopard features that haven’t been shown, specifically Windows virtualization built-in? Apple: No comment. Shipping in spring 2007.
• Apple taking orders for iPod shuffle. “Really excited” to begin shipping the model.
• Back-to-school promotion (Buy a Mac, get iPod nano) was a key factor in excellent back-too-school results. Apple won’t quantify iPod and/or Mac results due to promo.
• Apple believes “video will be big” in portable space.
• Mac gross margins in Sept. QTR: Apple “quite happy” with those margins. Will not comment further.
• Game and movie sales via iTunes Store to be released at later date. Apple “pleased” with sales.
• Apple has “plan to integrate Boot Camp into Mac OS X Leopard next spring.”
• Boot Camp downloads: over 1,000,000 downloads.
• Mac results due to completion of Intel transition, strong back-to-school sales, retail stores.
• Traffic in Apple Retails Store just above 20 million. Mac sales up 60% in retail stores.
• iPod gross margin above 20% in September quarter.
• iPo has just under 40,000, Mac a little over 7,000 points direct and indirect channels worlwide.
• 54% direct sales up from 50% in June and 52% Y-O-Y. Apple happy with direct and indirect channels.
• Desktop growth up 4% Y-O-Y; result of widespread move by customer to portables.
• iPod nano customer reception “excellent.”
• Oppenheimer: Mac OS X Leopard will be shipping in the spring of 2007.
• Macs below 4-5 week mark for inventory levels.
• Apple believes iTunes+iTunes Store helps drive iPod sales.
• Apple running iTunes Store “at above break even” levels.
• Special committee found no misconduct of any Apple Board member including Steve Jobs.
• Japan Mac sales: PC market in Japan one of the weakest in the world, still Apple is not happy and working to bolster Mac sales to Japan.
• Inventory up about 100 million Y-O-Y: Due mainly to increased numbers of new stores’ inventory.
• Summer usually not the best quarter for music sales / new album releases.
• Apple “very confident with what is in product pipeline.”
• Apple pilot programs continue at select Best Buy and Circuit City locations.
• Apple skillfully executed the Intel transition within the last year.
• 70-73 cents per share forecast for Q1 07.
• Apple targets $6-6.2 billion revenue for Q1 2007 (2006 Q 4 holiday quarter).
• Apple now has over $10.1 billion in cash on hand.
• Education store: most successful ever, shipments increased 49% year-over-year.
• Over 50% of customers buying Macs are new to Mac at Apple retail stores.
• Apple retail stores: 165 with 10 new stores opened during quarter.
• Nielsen SoundScan: iTunes accounts for 88% of music downloads in U.S.
• Apple very confident in current iPod lineup for holidays.
• 42% of total company revenue from “music” products.
• 61% of all Macs sold during quarter were portables. nearly 1 million portables sold during quarter.
• Oppenheimer: Best Mac shipments “BY FAR” in the company’s history. 1.38 million Macs was previous best record in Q1 2000.
• These results compare to revenue of $3.68 billion and net profit of $430 million, or $.50 per diluted share, in the year-ago quarter.
• Gross margin was 29.2 percent, up from 28.1 percent in the year-ago quarter.
• International sales accounted for 40 percent of the quarter’s revenue.
• Apple shipped 1,610,000 Macintosh computers and 8,729,000 iPods during the quarter, representing 30 percent growth in Macs and 35 percent growth in iPods over the year-ago quarter.
• Apple posted revenue of $4.84 billion and net quarterly profit of $546 million, or $.62 per diluted share.
Related articles:
Apple shares rocket 6.5% in after-hours trading on stellar earnings report – October 18, 2006
Apple Q4 earnings results: $546M net profit on $4.84B revenue, sold 1.61M Macs, 8.729M iPods – October 18, 2006
“The Mac is a dead platform.’
“Nobody buys Macs anymore.”
Aaaah,….nostalgia.
fook me backwards with a bent banana, I bought at 23, the simple pleasures are the most rewarding. AAPL = 100+, then split me again baby.
Occam:
I bought at around 23 also. Couldn’t help but notice the snicker of the investment banker I was dealing with.
Guess who’s laughing now.
“Game and movie sales via iTunes Store to be released at later date. Apple “pleased” with sales.”
Could this imply that a new product announcement will be right around the corner? You know sometimes Steve likes to announce numbers like that at the beginning of some new product anouncement.
“Could this imply that a new product announcement will be right around the corner? You know sometimes Steve likes to announce numbers like that at the beginning of some new product anouncement.”
——-
Could be… But it could also mean that the numbers are not very impressive..
They forgot one bullet point:
– Jimbo von Winskinheimer very very very happy with his AAPL holdings. Might sell a few shares to take a freakin’ cool vacation, tho.
simple, buy AAPL, we all know what’s in the pipeline, oh yes we do, the phone and the widescreen iPod are going to be farking huge. I love AAPL.
Yeah, remember that article from a few days ago? ‘The ads aren’t working, blah blah blah’… who’s eating their words now!
This is just the beginning!
Magic Word: Best. As in best quarter for Macs ever. How does it do that?!
Where’s Thurott, sputnick and the other M$FT lapdogs?
Come on AAPL; mother needs a new pair of diamond ear rings.
” width=”19″ height=”19″ alt=”raspberry” style=”border:0;” />
simple, buy AAPL, we all know what’s in the pipeline, oh yes we do, the phone and the widescreen iPod are going to be farking huge. I love AAPL.
—————–
Actually, a widescreen iPod will probably have limited appeal because of the price… It will obviously be the most expensive iPod and quite frankly, the masses are buying nanos.
Personally, I think Apple will also introduce an HDTV next year too.
allen, you may mark my simple words here . . the widescreen iPod will be the biggest ‘must have consumer item ever’ the iPhone will rip the existing phone market apart. It is simple, apple interface just blows the competition.
I believe that Rob Enderle should be along any moment now to say he was wrong.
Or is he going to say that when he referred to the fourth quarter, he was talking about the calendar year.
Allen,
When using phrases like “obviously” and “quite frankly” caution is advised; they can turn around and bit you. Especially when they negatively reflect on the electronic gizmo of the 21st century!
I agree that an Apple iPhone will be huge… And I’m not saying that a widescreen iPod won’t be popular, I’m sure it will do well… I just don’t believe that there is a market for portable video as there is for portable music. You can listen to music on an iPod anywhere, anytime, while you’re doing other things.. Video on the other hand requires the users full attention.. I mean a widescreen iPod would be great for travel or an airplane, but how many places do you honestly think you’ll be where you would rather watch a video on an iPod instead of on a tv? For me personally, I enjoy my fifth gen iPod, but I only occasionally use the video portion of it and it’s not because the screen is too small, it’s because there just are not that many places outside of the house where I feel the need or have the time to watch a movie or video….. And I honestly don’t believe I would watch more videos on it if the screen was bigger.. If I’m home, I watch movies on my tv.. If I’m traveling my 2.5 inch fifth gen screen is fine..
I’m not attacking the idea of a widescreen video iPod, I just believe it is a device with limited usability and will face limited appeal compared to a cheaper music-only iPod.
-“Apple believes “video will be big” in portable space.”
hmmm. video. big. portable.
Allen, I agree with your theory. The music iPod is the electronic gizmo of the 21st century not a “true” video iPod. Here’s why:
* Can you watch a movie on an iPod while running?
* Can you watch a movie on an iPod while mowing the lawn?
* Can you watch a movie on an iPod while walking you’re dog?
* Can you watch a movie on an iPod while riding a bike?
* Can you watch a movie on an iPod while driving a car?
* Can you watch a movie on an iPod while walking to class?
* Can you watch a movie on an iPod while doing anything else?
The answer to all the above is NO.
A video iPod will be cool, but face it, having your entire movie collection with you at all times is not nearly as useful as having your entire music collection with you at all times.
More than half the sales in Apple stores to new mac users: incredible!!
I got in at 23 and soon I will cash some out and take a nice vacation. Thanks Steve
“What did you get?”
“I got a rock…..”
Those are some great numbers. I try and spread the word aka “Mac gospel” and have gotten a few to switch or atleast think about switching. i think word of mouth is driving more mac sales than those mac vs pc ads. I wish OS X was advertised along with those mac vs pc ads.
ps-im a switcher from about a year and a half ago and i’m never going back.
BY THE FREAKIN’ WAY! TO USE THE FRAKKIN’ HALLOWEEN SCREENSAVERS ADVERTISED TO THE RIGHT OF THIS FORM YOU NEED A FRAKKIN’ WINDOWS 95 COMPUTER OR BETTER! WHAT’S THIS! JEEZUZ, MAN! WILL YOU TAKE ANYBODY’S ADVERTISING MONEY! I MEAN JEEZ!