John Paczkowski

Recent Posts by John Paczkowski

Another Blowout Quarter for Apple

A subscriber to the underpromise-and-overdeliver school of guidance theory, Apple is reknowned for issuing almost comically conservative revenue outlooks and then exceeding them.

This quarter was no different. Reporting earnings after the bell Monday, Apple (AAPL) posted a fiscal first-quarter profit of $3.38 billion on revenue that rose 32 percent to $15.68 billion. That far exceeded analysts’ forecasts of $12.1 billion.

It was the company’s all-time highest revenue and profit.

Apple sold 3.36 million Macs during the quarter–33 percent more than it sold a year ago. And the company sold 8.7 million iPhones. That’s 100 percent unit growth over the year-ago quarter, but a bit fewer than the 9.1 million The Street had been expecting. IPod sales topped out at 21 million, an eight percent unit decline from last year.

“We are very pleased to have generated $5.8 billion in cash during the quarter,” Apple COO Peter Oppenheimer said in a press release issued with the results. “Looking ahead to the second fiscal quarter of 2010, we expect revenue in the range of about $11.0 billion to $11.4 billion and we expect diluted earnings per share in the range of about $2.06 to $2.18.”

And in a nod to the company’s special event this Wednesday, Apple CEO Steve Jobs said, “The new products we are planning to release this year are very strong, starting this week with a major new product that we’re really excited about.”

NOTES FROM THE EARNINGS CALL

  • Apple saw killer Mac sales this quarter, beating its previous record set in the September quarter by “over 300,000,” Oppenheimer reported.
  • The company sold almost 21 million “traditional” iPods, compared with sales of 22.7 million a year ago. Oppenheimer said that decline was expected and was offset by the 55 percent year-over-year growth in sales of the iPod touch, which increased ASP and revenue.
  • Apple now has iPhone distribution in 86 countries.
  • The company expects to open 45 to 50 stores in fiscal 2010. Half will be in international locations.
  • Enterprise demand for the iPhone is increasing. “Business customers have ranked iPhone the number 1 smartphone in the J.D. Power customer satisfaction survey for the second year in a row,” Oppenheimer reported. “And we have continued to see a rapidly growing number of CIOs who have added iPhone to their approved device list.”
  • As a result of the new accounting standards Apple has adopted, financial results of each quarter from fiscal 2007 through fiscal 2009 have been revised.
  • COO Tim Cook on issues with AT&T’s (T) network and how its bad press affects Apple: AT&T is a great partner. You know, we’ve been working with them since before the first iPhone. In the vast majority of locations, they provide a great experience. But there have been issues in some cities. They have acknowledged this and developed a plan to make things better and we have personally reviewed them. Cook added that he has “very high confidence” AT&T will resolve the issues to which he referred.
  • Cook on the “major new product” Jobs hinted at in the company’s earnings release: “We have nothing to share today. Please stay tuned.”
  • Apple expects to see a sequential decline in Mac sales next quarter, which is “typical.” The company expects traditional iPod sales to decrease, potentially even more than in the past.
  • Earlier this month, Apple passed 200,000 for the number of iPhones activated in China. Cook: “We’re happy with China Unicom.”
  • Tim Cook to an analyst digging for details about the company’s upcoming product announcement: “I wouldn’t want to take away your joy and surprise on Wednesday when you see our latest creation.”

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald