Apple smashes Street, posts revenue of $7.1 billion and record net quarterly profit of $1 billion

Apple today announced financial results for its fiscal 2007 first quarter ended December 30, 2006. The Company posted record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share. These results compare to revenue of $5.7 billion and net quarterly profit of $565 million, or $.65 per diluted share, in the year-ago quarter. Gross margin was 31.2 percent, up from 27.2 percent in the year-ago quarter. International sales accounted for 42 percent of the quarter’s revenue.

Apple shipped 1,606,000 Macintosh computers and 21,066,000 iPods during the quarter, representing 28 percent growth in Macs and 50 percent growth in iPods over the year-ago quarter.

“We are incredibly pleased to report record quarterly revenue of over $7 billion and record earnings of $1 billion,” said Steve Jobs, Apple’s CEO, in the press release. “We’ve just kicked off what is going to be a very strong new product year for Apple by launching Apple TV and the revolutionary iPhone.”

“We generated over $1.75 billion in cash during the quarter to end with $11.9 billion,” said Peter Oppenheimer, Apple’s CFO, in the press release. “Looking ahead to the second fiscal quarter of 2007, we expect revenue of $4.8 to $4.9 billion and earnings per diluted share of $.54 to $.56.”

Apple will provide live streaming of its Q1 2007 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. PST on Wednesday, January 17, 2007 at http://www.apple.com/quicktime/qtv/earningsq107/ and will also be available for replay.

MacDailyNews Note: Ahead of the earnings release, Thomson First Call analysts had expected Apple to make 78 cents a share on sales of $6.42 billion for the first quarter.

62 Comments

  1. Wow, a $7B quarter. Just a few short years ago, $7B was revenue for a WHOLE YEAR! How things have changed. And, companies that generate $1B in income are big companies, not niche ones.

    And, look at that iPod number. That BLEW away the analyst predictions of 14 to 16 million. The only person to predict over 20 million was Carl Howe of Blackfriars, who consistently comes closer to Apple’s numbers every quarter, and he’s a media specialist not an analyst.

  2. Everyone expected AAPL to drop after the earnings report, so that they could buy on weakness.

    But the stock jumped up instead, to a high of $99.48 in after hours trading.

    The stock failed to break resistance at $100, and short sellers took control, dropping the stock to ~$95.90 currently, below yesterday’s close at $97.10.

    Apple’s Mac shipments were lighter than expected (1.6 million vs. 1.7 million), and this has raised concerns about margin. But the stupendous shipment of 21.07 million iPods may have blunted that concern.

    Apple as usual issued conservative guidance, which in this case is actually downside guidance, but most investors know how conservative Apple usually is, and that Apple usually beats when it reports its actual numbers.

    In addition, the next quarter (Fiscal Q2 2007, i.e. January through march 2007) is Apple’s weakest quarter, coming after the holiday quarter. So the prospects for AAPL are a bit cloudy. It may climb towards the obvious target: $100. Or it may consolidate and drift downwards, towards the $93 range, in which case it becomes an obvious buy.

    Look for analysts to reiterate their rankings and price targets of AAPL tomorrow, which should provide support for the stock. Also look for increased earnings estimates, as analysts start factoring in revenue from AppleTV and iPhone in the second half of 2007.

  3. Wow. “Smashes” is right.

    I hope the next two quarters will be “relatively” successful, during the wait for iPhone. Apple may have “frozen” some smart phone purchases, but it may have frozen some video-capable iPod purchases as well. Although the iPhone lacks storage capacity, I’m sure people are expecting a new “full-size” iPod (that’s not a phone) with the 3.5-inch touch-screen interface. Fortunately, the release of Leopard will no doubt take place during the next two months, and that will push up Mac sales. The wait for Leopard may account for Mac sales being up “only” 28%, which I think is a pretty good showing.

  4. 21 million iPods, Apple must surely be reaching the magical 100 million mark. I wonder if they will have a fanfair for the 100th million ?????

    Maybe it will be a special limited edition “St Pepper” one ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    H

  5. “Apple shipped…21,066,000 iPods during the quarter, representing… 50 percent growth in iPods over the year-ago quarter.”

    Well, it is too bad this is meaningless. After all, we all know that iTunes sales are plummeting and with Apple’s propriety system, you can only play media from the iTunes store on iPods.

    for those that need to be told: no, not serious

  6. I think next Wednesday we will be talking about a new release from Apple-something every week to keep them in the spotlight.

    I also think there could be a small pent up demand for new Macs and once Leopard is released Mac sales will be going up. Way up.

    I also think iPod sales may slow, at least the higher end units, until the iPhone is released or until Apple comes out with a full screen iPod.

  7. Apple expects operating margin to drop from 18% last quarter to ~12% this quarter. The drop is attributed to the favorable commodity prices not beeing sustained going forward.

    AAPL is trading at $94.73. The short sellers are in control right now.

  8. I’m waiting for Leopard to ship, and my new stylish 12″ multitouch, super duper, ultra pro portable, magical computer (Harry Potter eat your heart out.)

    When that happens mac sales will soar to magical heights. You heard it here first.

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