Apple bulldozes Street: $1.26 EPS; Mac sales reach all-time high of 2.5m, 6.9m iPhones, 11m iPods

Apple today announced financial results for its fiscal 2008 fourth quarter ended September 27, 2008. The Company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share. These results compare to revenue of $6.22 billion and net quarterly profit of $904 million, or $1.01 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, up from 33.6 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter’s revenue.

MacDailyNews Note: Analysts’ consensus estimates for Apple’s Q4 08 called for $1.11 EPS, on revenue of $8.05 billion, or 29.4% YOY sales growth. Peter Oppenheimer, Apple’s CFO, had provided guidance of “about $7.8 billion” and earnings per diluted share of “about $1.00.”

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone and Apple TV over their economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures (more info) for the quarter are $11.68 billion of “Adjusted Sales” and $2.44 billion of “Adjusted Net Income.”

Apple shipped 2,611,000 Macintosh computers during the quarter, representing 21% unit growth and 17% revenue growth over the year-ago quarter. The company sold 11,052,000 iPods during the quarter, representing 8% unit growth and 3% revenue growth over the year-ago quarter. Quarterly iPhone units sold were 6,892,000 compared to 1,119,000 in the year-ago-quarter.

“Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone—we sold more phones than RIM,” said Steve Jobs, Apple’s CEO, in the press release. “We don’t yet know how this economic downturn will affect Apple. But we’re armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt.”

“We’re very pleased to have grown revenue 35 percent and to have generated $9.1 billion in cash in fiscal 2008,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter. We are providing a wide range for our guidance, targeting revenue of $9.0 to $10.0 billion and earnings per diluted share between $1.06 and $1.35.”

MacDailyNews Take: Analysts’ consensus estimates for Q1 09 call for $1.65 EPS, on revenue of $10.57 billion, or 10.0% YOY sales growth. It’s nice to see Apple providing a “wide range” instead of harder guidance, but even the top end of EPS guidance doesn’t come close to expectations. We’ll see how the market treats this guidance. If history is any guide, it won’t be pretty.

Apple will conduct a conference call to discuss the company’s results today, Tuesday, October 21, 2008 at 2pm PT/5pm ET.

MacDailyNews will be covering the conference call via live notes at that time. The live coverage will appear at the top of our home pages shortly before 5pm ET.

The link to the QuickTime stream of the conference call is here.


  1. Is this where wall street goes, APPLE BEAT EXPECTATIONS?!?!?!? SELL SELL SELL. Seems for last year every time apple posts amazing earnings, they wind up down 10% the next day. Maybe they should use reverse psychology, give away macs to 40% of the population, post miserable earnings and boost their stock dramatically.

  2. This is great news, I went to an all cash position in March of this year. Thanks to the market, and the ignorant, I will be able to buy AAPL, RIO, TIN, BRCM and a host of others at a huge discount. I might even be able to get AAPL at a 75% discount. I can not explain enough how great our country is.

  3. So based on this quarter compared to year ago, that accounts for 8 million iPhones. Remember when everyone said no way they would sell 10 million by the end of 2008? Those were the good ol days!

    Why is their after-hours trading halted?

  4. You should adjust iPhone numbers for the fact that they stopped selling the original iPhone 2 months ahead of the 3G launch. There was a lot of pent up demand. Still an awesome performance but as usual the sandbag hits hard. Seriously, why even issue guidance when you say you’ll make between $1.06 and $1.35 per share for the quarter. That is meaningless. The stock will trade randomly but anyone who invests and doesn’t trade should buy this stock. Best quote from Steve: “We have $25 billion cash safely in the bank.” What a different story from 10 years ago!

  5. ““Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone—we sold more phones than RIM,” said Steve Jobs, Apple’s CEO, in the press release. “We don’t yet know how this economic downturn will affect Apple. “

    The downturn in the economy won’t have as large an affect on AAPL as the ANALysts will. Apple gives guidance (although a range this time) and sticks to it whereas above referenced anal sphincters will float hither and yon with “revisions”, just like they always do trying to make themselves look good come next earnings call. I still think no guidance at all or, as I said once before, simply “guess!” might have been the best course to take if for nothing else but to see what the reaction from The Street would be!!

  6. there is no true relation regarding company performance and AAPL stock. Depending on the action tomorrow, buy AAPL if it opens down hard (doesnt seem likely)… or wait for late November to buy. AAPL goes up on hype/buzz, although the facts (earnings report) do support the hype. By the time the earnings report comes out, it is too late. If anything, RIMM (Blackberry) is in trouble… and the notice how it is also priced into its stock during earnings. That exemplifies how AAPL acts in its own bubble. Another example was the rumor of an $800 laptop, stock jumped.

  7. Spectacular results! In fact it means that to date Apple have sold 13M iPhones!

    2007 Q3 0.27
    2007 Q4 1.12
    2008 Q1 2.32
    2008 Q2 1.70
    2008 Q3 0.71
    2008 Q4 6.89
    Total Iphone 13.00

    Any idea how many iPod touch devices they have sold? I am curious as to what is the potential market for App Store developer (i.e., # iPhone + iPod devices in use)?

  8. The gross margin really helped them on the EPS front. The higher GM has been helping them a lot for some time now.

    Great iPhone sales as the S/N trackers predicted (7M). iPod sales remains a mature business that generates lots of cash without much investment required (as far as I can tell).

    It’s hard for me to see Mac sales hitting high estimates with the economy as it is, but as SJ says, Apple customers will defer purchase rather than switch.

    Crummy forecast as usual, but I agree with MDN that a range makes a lot more sense than a number.

    I think the stock is likely to remain rangebound (along with the market), but certainly we all can agree the company is very well positioned to grow well when the economy rebounds.

  9. @ Frank

    And the REPUBLICANS handing out $850 BILLION, “investing” in Banks, car companies and private companies ISN’T Communism or Socialism?!?

    wtf, get your head out of your arse, dude

    McCranky & Paleone gonna go back to their day jobs Nov 5th.

  10. @ MaLvado

    Oh sure, punish the hard work by Apple when they were almost bankrupt.

    When I was in college, I wish they could could have done the socialist thing. It would be great.

    Party all the time, blow off classes, then at the end of the quarter get the guy who got straight A’s to give you 2 points and you all get C’s. What a deal!

    Dumb ass socialists. Didn’t work in Russia or East Germany.

    How’s Cuba doing?
    Any computers being produced there?

    Families moving to better houses and bigger yards, buying a second car?

    If you like socialism so much, move to one of those countries. See how long you last.

  11. @Frank,

    Why don’t you call him a fascist, Nazi-sympathizer, as well while

    you’re at it?

    The McPalin campaign is doing nothing but name-calling. Seems

    pretty junior highish to me.

    As for Apple quarterly profits and guidance, there’s no telling

    what the goobers running the stock market will do. All I know is

    that Apple is in a better spot than just about any other tech

    company and has the resources to keep working right through the


  12. >The McPalin campaign is doing nothing but name-calling.

    That’s because there are plenty of adjectives and nouns that accurately describe Obama: racist, socialist, liberal, novice to name but a few.

    Now Biden is warning America that the Obama will be “tested” during his first six months in office (because he is a complete unknown and incapable of performing a CIC).

  13. “The meaning of peace is the absence of opposition to socialism.”
    Karl Marx

    “From each, according to his ability; to each, according to his need.”
    Karl Marx
    “It’s not that I want to punish your success; I just want to make sure that everybody who is behind you that they’ve got a chance to success, too. I think when you spread the wealth around, it’s good for everybody.”
    Barack Obama

    Of course, the last two times we have tried ‘redistributing the wealth’ any significant way was the 1930s, and again in the 1970s. Result? The Great Depression, and “Stagflation”. Recovering from both of those required cutting tax rates and building the wealth through productivity and entrepreneurship in this country.

    What caused the current financial crisis? Democrat “redistribution of the wealth” scheme via GSE’s

    “History repeats itself, first as tragedy, second as farce.”
    Karl Marx

    May the farce be with you.

  14. To the political people throwing crap around. McCain and Obama are going to have the same effect, and similar results… both are going to end up costing you (and me) at the end of the day. We all f’d up when we let Ron Paul slip through our fingers. Our system is Washington is so far broken that it is going to take radical rebuilding and rethinking, not “Mavericks” or “Change” people.. but complete rethinking about how we do things. It is hard to grasp what needs to be done, but both of these guys are going to continue to do basically the same crap that has gone on for years and years and years.

    We have to get someone in the office who is going to REALLY cut the BS, and look at the presidential job as an honor to serve the general public, not serve his buddies that backed his/her campaign and a power trip (see the last 8 years if you do not understand)

    I know come election day, I will not be voting McCain or Obama.. my state allows a write-in, and I will exercise that option. It is no more of a “wasted vote” than voting the Republican party or Democratic party in this election.

    The Dude abides.

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