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Apple (Nasdaq: AAPL) posted its best quarter ever and surpassed analysts' expectations, with net profits for its first quarter more than quadrupling compared to the year-ago quarter. Surging iPod and PowerBook sales drove the record-breaking gains.
The Cupertino, California-based computer maker posted a net income for its first quarter ending December 31 of US$295 million, or 70 cents per diluted share, compared to a net profit of $63 million, or 17 cents per diluted share, during the same quarter in 2004.
"We are thrilled to report the highest quarterly revenue and net income in Apple's history," Apple CEO Steve Jobs said. "We've sold over 10 million iPods to date and are kicking off the new year with a slate of innovative new products including iPod shuffle, Mac mini and iLife '05."
Revenue Up 74 Percent
Revenue for the quarter was $3.49 billion, up 74 percent from the year-ago quarter. Gross margin was 28.5 percent, up from 26.7 percent in the year-ago quarter. International sales accounted for 41 percent of the quarter's revenue. Analysts had expected revenues of between $3.18 billion and $3.3 billion.
"We're pleased to report 74 percent revenue growth, 26 percent Mac unit growth and 525 percent iPod unit growth," Apple CFO Peter Oppenheimer said.
Apple shipped 1.046 million Macintosh units and 4.58 million iPods during the quarter, representing a 26 percent increase in CPU units and a 525 percent increase in iPods over the year-ago quarter. This beat Goldman Sachs' estimate of 4.5 million iPod shipments. Credit Suisse First Boston had estimated 4.8 million shipped.
As for what to expect next, Oppenheimer said, "Looking ahead to the second quarter of fiscal 2005, we expect revenue of about $2.9 billion and earnings per diluted share of about 40 cents."
Looking Ahead
Apple predicted sales will be $2.9 billion in the current quarter, which ends in March. Analysts had been projecting 33 cents on sales of $2.74 billion.
Apple unveiled its new Mac mini, a new low-end Macintosh, at MacWorld Expo yesterday, along with a new iPod shuffle, a flash-based music player, and new software.
"It was one of the most product-heavy MacWorlds in recent memory, and while most of the new products were expected by the marketplace, their details and form factors remained largely unknown," a report from analyst firm CSFB said.
CSFB analysts said Apple is well-positioned "to deliver another strong performance in the March quarter." The firm said the Mac mini "will enable the company to, at a minimum, hold market share in the future" and "on a longer-term basis, the Mac mini will drive future hardware and software upgrades and allows the company to better compete with a broader product portfolio."
Impact Hard To Project
Directions on Microsoft (Nasdaq: MSFT) lead analyst Michael Cherry said it is difficult to forecast a new product's impact the day after it is announced.
"The Mac mini is really good news and it will be interesting to see how it performs in the marketplace," Cherry told MacNewsWorld. "We still need time to see what these boxes look like, what people can really do with these machines, and how much it costs them to get home with a useful processor, monitor, keyboard, mouse and software."
Before it issued its earnings report, the company's shares rose 90 cents to $65.46 by the 4 p.m. close of the Nasdaq. Apple shares were soaring higher in after-hours trading.
