Analysts react to Apple’s dazzling earnings report, upbeat guidance

Apple today blew away Street expectations, announcing record financial results for its fiscal 2007 fourth quarter ended September 29, 2007. The Company posted revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share. These results compare to revenue of $4.84 billion and net quarterly profit of $542 million, or $.62 per diluted share, in the year-ago quarter. Gross margin was 33.6 percent, up from 29.2 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue.

Ahead of earnings, analysts’ consensus estimates, as surveyed by Thomson Financial, were for Apple will earn $0.86 per share on $6.07 billion in revenue for the quarter, compared to a profit of $0.62 per share on $4.84 billion in revenue in the year ago quarter.

Apple shipped 2,164,000 Macintosh computers, representing 34% growth over the year-ago quarter and exceeding the previous quarterly record for Mac shipments by 400,000. The Company sold 10,200,000 iPods during the quarter, representing 17 percent growth over the year-ago quarter. Quarterly iPhone sales were 1,119,000, bringing cumulative fiscal 2007 sales to 1,389,000.

Apple guided above Wall Street expectations for Q1 08: Apple sees revs of $9.2 billion and earnings of about $1.42 per share. The Street consensus was for $8.58 billion in revenue and earnings of $1.39 per share.

Apple’s iPhone, “a combination cell phone, iPod and multimedia Web device, ‘is a game-changing product,’ said Stephen Coleman, chief investment officer at Daedalus Capital LLC,” May Wong reports for The Associated Press.

Wong reports, “Based on income from the iPhone alone, ‘I expect Apple’s earnings to continually grow materially at 50 percent a year, for the next three years,’ Coleman said.”

Full article here.

“‘They knocked the cover off the ball,’ Roger Kay, an analyst at Endpoint Technologies in Wayland, Massachusetts, said in an interview. ‘More than 2 million Macs, sold lots and lots of iPods, and the phones have done better than expected,'” Connie Guglielmo reports for Bloomberg.

“‘They’ve tended to underpromise and overdeliver,’ said Romeo Dator, who helps manage $5.3 billion at San Antonio-based U.S. Global Investors Inc., which owns Apple shares. ‘They’ll probably overdeliver again.'” Guglielmo reports.

“‘Apple is reaching a strong inflection point in terms of PC market share,’ said Mike Abramsky, an analyst at RBC Capital Markets, which raised its Apple share price estimate by 17 percent to $205 last week. ‘Even though there’s a lot of focus on the iPhone, it’s really the Mac that’s driving the growth in revenue and earnings per share,'” Guglielmo reports.

Full article here.

“‘There’s no question that Mac sales are still having a halo effect from the iPod and iPhone,’ said Tim Bajarin, president of technology consulting company Creative Strategies,” Reuters reports.

“‘The guidance was extremely strong, well north of consensus. It appears that they are expecting an extremely solid holiday shopping season and, I would guess, strength from the launch of the iPhone in Europe,’ said analyst Shannon Cross of Cross Research,” Reuters reports.

Full article here.

30 Comments

  1. Hey, don’t be so bullish on AAPL, folks. After all, MSFT was up $.34 today . . . and is within $.50 of being back to where it was in January of this year.

    GO MSFT! Ballmer and Gates, they’re our guys!

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