MacDailyNews presents live notes from Apple’s conference call discussing Q409 financial results.
Live notes will begin today at 2pm PDT/5pm EDT in reverse-chronological order:
• Conference call ends.
• Apple again refuses to talk about the anticipated Q110 air freight cost increases in terms of specific products
• The State of Maine buy helped immensely
• Student Mac buys significantly helped Apple’s online sales. Apple still worried about state education spending.
• iPhone sell-through up 38% YOY which is a significant multiple vs. the smartphone market growth overall
• Apple continues to be pleased with the number of government agencies and corporations that are deploying or evaluating iPhone for widespread deployment
• Over 350 higher ed institutions have approved iPhone for faculty and students
• Apple provides guidance based on GAAP and will continue to report both GAAP and non-GAAP results
• iPhone already ships in over 80 countries today; iPhone 3GS in 64 countries so far and to be in over 80 by end of calendar year
• Demand for the new MacBook Pros was very high during the quarter
• Snow Leopard also prompted greater Mac sales
• Apple Mac sales benefitted from 50,000 unit order (added to 20,000 in Q3) to state of Maine
• Apple spending capital on facilities, infrastructure, and manufacturing
• Macs in Spain was extremely strong (40%), germany 40%, France 39%, Switzerland and Italy in mid-30s percent increases.
• 13,000 Mac points of sale worldwide; Mac growing stronger outside U.S than inside (due to economic conditions).
• Air freight costs in Q110 are expected larger than normal; Cook will not mention product involved; airfreight will be “an abnormal sequential increase.”
• Cook: iPhone 3GS demand outstripped supply for most of the quarter; created component shortages; Apple solved most of the supply/demand issue by early Oct. at latest
• Apple’s new unibody MacBook Pros (introduced in June) had a very strong quarter
• Oppy: iPhone ASP in quarter just over $600 (high mix of 3GS and channel inventory rebalancing towards 3GS model from 3G)
• Cook: Apple investing confidently in their future: R&D, engineering, and marketing
• Oppy: Apple’s international retail store revenue up over 20% for the quarter
• Oppy: Apple’s remodeled stores showing strong results (72 stores remodeled so far this year)
• Apple will not forecast future quarters on quantitative basis, but “Apple plans to offer ever-increasing value to customers.”
• Mac OS X Snow Leopard: More than double those of Leopard over first 5 weeks of sales
• Mac channel inventory started and ended quartet at 3-4 weeks (less than 15,00 units changed from start to finish of quarter)
• Tim Cook: Apple Mac. Portable Macs up 35% YOY. Blowout quarter for MacBooks. helped by Back to School (strongest Apple’s ever had)
• Tim Cook: People are still trying to catch up with the original iPhone and Apple has long since moved well beyond that device
• iPhone wannabes like Google Android-based devices? Apple now has over 21 million for fiscal year and significant momentum. 85,000 apps in App Store is a “country mile” ahead of anyone.
• Tax rate was 26% due to higher mix of non-U.S. earnings; Apple had expected about 30%
• Popularity of iPhone 3GS has been phenomenal and Apple was very surprised by the demand
• iPhone seasonality? Apple has very few Sep. – Dec. to look at thus far, so seasonality is difficult to forecast
• Generally speaking,in multiple carrier markets, Apple’s wholesale price stays the same; the end user price is set by carriers themselves
• Apple very excited to begin selling iPhones in China
• Apple iPhone’s China Unicom launch on October 30th at about 1,000 points of sale in China
• iPhone channel inventory: 2.1 million units in the channel; would like to have more; Supply constraints: improved in September. Supply and demand converged in Sept. or early Oct. Still short in some countries.
• Oppy: Gross margin to decline due to new products that Apple will deliver in the coming months, significantly more air freight, lower Snow Leopard box sales as launch recedes
• Apple is confident in their product pipeline and very enthusiastic in the year ahead
• In extraordinarily challenging economic times, Apple grew strongly
• Looking ahead to the first fiscal quarter of 2010, Apple expects “revenue in the range of about $11.3 billion to $11.6 billion and diluted earnings per share in the range of about $1.70 to $1.78.”
• Guidance for next quarter is based on subscription (24-month) accounting rules
• Apple will adopt new accounting rules as soon as possible and are currently evaluating when to make the change
• Apple plans to open 4th Manhattan store and also first stores in France, including one at The Louvre
• Apple Retail Stores revenue $1.87B during quarter; about 50% of Macs sold were to those “new to Mac.”
• iTunes App Store
• Apple looking forward to bringing iPhone to China later this month
• Apple sold 7.4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter.
• iPod continues to gain share in every country tracked
• Apple sold 10.2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter
• Apple began and ended quarter with 3-4 weeks of Mac channel inventory
• 12% YOY Macs sales to U.S. education institutions (thanks, Maine!)
• Apple posted revenue of $9.87 billion and a net quarterly profit of $1.67 billion, or $1.82 per diluted share vs. revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share, in the year-ago quarter
• Gross margin was 36.6 percent, up from 34.7 percent in the year-ago quarter
• International sales accounted for 46 percent of the quarter’s revenue.
• Oppy: Apple’s most profitable quarter ever; with record Mac and iPhone sales
• Apple CFO Peter Oppenheimer, Apple COO Time Cook present for conference call
• Apple (AAPL) shares are currently up $14.82, to 7.88% to $202.87
Did you just hear what he said? Lower margins on the new products and they expect “signficantly” higher air freight charges. Did he just admit to the iTablet or what?
Hopefully, “lower margins” on new products means the iTablet will actually be affordable (say $700-$800?).
” Gross margin was 36.6 percent, up from 34.7 percent in the year-ago quarter” take that Dell biatch!
And referring to a followup question he just now said “we can’t be specific about the product”. Singular. And said this is atypical – way over anything they’ve seen before.
pant, pant, pant….
“• Air freight costs are larger than normal; Cook will not mention product involved; airfreight will be “an abnormal sequential increase.””
Those Apple Televisions? Tablets don’t take up that much space.
Imagine how the American economy would flourish with a flat income tax and corporate tax rate of 10%. 30% is outrageous.
Mac sales are up and 50 percent are still new to the Mac? That’s impressive.
on how much cash reserves aapl i sup to now?
Yes, I was wondering the same thing? Cash reserves ?
Just watched an apple segment on Neil cavuto, really plugged apple! On how the USA should study what makes apple so succesful!!
“iPhone sell-through up 38% YOY which is a significant… “
Would somebody please give me the definition of the about phrase.
All those “State of Maine” references you’d think Apple was trying to make governments guys in Massachusetts look wicked dumb.
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Will next quarter be snappier?
@silver
I think sell through, means to the end customer, not just delivered to the providers? I may be wrong , I too would like an explanation
I believe the call said cash reserves were now $35,000,000,000, invested with “capital preservation” in high quality short-term instruments (probably T-bills) which has “served them well” in the current environment.