[opendtv] News: IPod Sales Give Apple 75% Jump in Revenue
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 14 Jul 2005 09:39:10 -0400
http://www.nytimes.com/2005/07/14/technology/14apple.html?th&emc=th
IPod Sales Give Apple 75% Jump in Revenue
By JOHN MARKOFF
Published: July 14, 2005
SAN FRANCISCO, July 13 - Showing continued strong growth of its
popular iPod digital music player and impressive personal computer
sales in the United States, Apple Computer reported quarterly
earnings on Wednesday that far outpaced the expectations of financial
analysts.
Apple said net income for its third quarter, ended June 30, rose to
$320 million, or 37 cents a share, from $61 million a year ago, or 8
cents a share, adjusted for a stock split.
The results surpassed the consensus forecast of analysts, which was
31 cents a share. Moreover, revenue increased 75 percent to $3.5
billion, from $2.01 billion during the quarter in 2004.
The earnings report came after the close of trading, with Apple up 11
cents a share, to $38.35, on Nasdaq. So far this year, the stock has
risen about 18 percent, after tripling in 2004. In after-hours
trading, the stock rose as much as 3.5 percent, to $39.70.
"Over all it's great news," said Barry Jaruzelski, vice president for
communications and technology at Booz Allen Hamilton, a technology
strategy and consulting firm.
"All of the speculation over whether the iPod has peaked has been
put to bed for at least a quarter," Mr. Jaruzelski said.
Apple reported sales of 6.1 million iPod music players. IPod revenue
was $1.1 billion for the quarter, an increase of 16 percent quarter
to quarter and of 343 percent from year to year. The company also
pointed to a strong start for the latest version of its Macintosh OS
X operating system, named Tiger, which sold more than two million
copies during its first quarter of availability, with revenue of more
than $100 million.
Apple said that sales of Tiger and other software programs
contributed significantly to its unexpectedly high gross margins:
29.7 percent for the quarter, up from 27.8 percent a year ago.
The chief financial officer, Peter Oppenheimer, also said that
quarterly sales of Macintosh computers had reached a four-year high,
with 1.18 million systems shipped, and that the company had sold
495,000 notebook computers, a record.
The company said that inventory levels for music players and
computers were within ranges it had forecast.
The company's obvious enthusiasm for the quarter was tempered during
a conference call with analysts by what Mr. Oppenheimer referred to
as a "prudent" forecast of flat to slightly declining revenue for its
fourth quarter.
"We are being prudent in our first quarter after our Intel
transition and expect to learn more during the quarter," he said.
The cautious forecast caused a number of financial analysts to
question whether the company had experienced a decline in sales
during the quarter after announcing in June that it planned to switch
from I.B.M. to Intel for its processors.
"We saw no obvious reduction in sell-through after the announcement,"
said Timothy D. Cook, Apple's executive vice president for worldwide
sales and operations.
But he stressed that the company had only several weeks of sales
data and expected to learn more about whether consumers would defer
purchases in the current quarter, which ends in September.
"The question for the investor is, Do you want to worry about
something that is more than a year away?" said Richard S. Chu, a
financial analyst at the SG Cowen Securities Corporation.
At the same time, he noted that his firm had recently conducted a
survey of 1,400 consumers and found evidence that iPod sales
translate into Macintosh sales.
"We clearly feel there is a documentable halo effect," Mr. Chu said.
Apple said on Wednesday that it believed that it was winning back
market share among education customers in the United States.
It shipped 34 percent more computers to higher-education customers
than a year earlier, and 15 percent more computers to elementary and
secondary schools.
Mr. Oppenheimer said that because the International Data Corporation
had forecast a decline in PC sales to schools this year, Apple's
share of the education market was apparently growing.
Several analysts said that the most visible negative sign for Apple
was a 7 percent decline in sales in Japan. Mr. Cook said Apple was
working to improve its distribution channels there.
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