The bigger picture is that Armstrong’s turnaround is still in progress. Ad revenue was down 29 percent in the last quarter, though that number is worse than it looks. A big chunk of the decline comes from moves AOL has intentionally made that will cut revenue in the short run in return for more profitable sales down the road.

A more representative data set for Armstrong are his display ad sales, which are down 14 percent overall and 8 percent in the U.S..

The bad news is that the rest of the Web ad industry is well into rebound mode; the good news is that AOL has trained Wall Street to expect numbers like these. If you’re waiting to see positive sales numbers, Armstrong said during AOL’s earnings call this morning, wait until the second half of this year.

Investors hoping Yahoo might benefit from the same surge in online display advertising spending that drove Google to its recent big quarter are in luck–except for the big-quarter part.

Posting fourth-quarter earnings today after sacking one percent of its staff, the company reported net income of 24 cents per share on revenue of $1.21 billion. The Street doesn’t seem convinced, though. Yahoo shares are down 3.5 percent as I write this.

Analysts had been expecting earnings of 22 cents per share on $1.19 billion in net revenue–a big jump from the 11 cents per share the company reported in the same period last year, but a troubling decline from the $1.26 billion in net revenue that accompanied it. That said, display advertising did grow. For the current quarter, the company sees revenue in a range of $1.02 billion to $1.08 billion; analysts had been looking for $1.13 billion.

“We just completed a very encouraging quarter and year for Yahoo!, where we saw our plans to turn around the company gain momentum,” CEO Carol Bartz said in a canned statement. “For the year, operating income, margins, EPS, and return on invested capital doubled. Display advertising grew 17 percent. We completed the important North America Search transition to Microsoft on schedule and with high quality. We introduced new and updated products at a faster pace. And our content properties–like Yahoo! Sports and Yahoo! Finance–continued to innovate and extend their massive lead.”

Look for more coverage of the earnings call at BoomTown later this afternoon. Meanwhile, here’s the press release in full:

YHOO_Q410PressRelease_Final

(Also, you can see a slide deck of the financials here.)

[Image Credit: Byzantin3]

As Oppenheimer analyst Yair Reiner said in a note raising his target price on the company’s shares to $425, “It’s no surprise when Apple tops expectations, but it’s fairly rare to see it trounce Street’s targets on almost every line. Bottom line: big as Apple is, it shows no sign of slowing, not with the Verizon iPhone launching in 2Q11 and China growth accelerating to 400% year-over-year.”

Piper Jaffray analyst Gene Munster raised his price target to $483 from $438, observing in a research note that this quarter was the first in three years in which Apple issued EPS guidance above Street consensus (10 percent ahead of the Street). “Apple’s vision for itself as a mobile device company has come to fruition,” he said. “[The company] guided the March quarter more aggressively than it typically guides the out quarter relative to the Street. We see this as sign that it is bullish on the prospect of the iPhone at Verizon.”

At Deutsche Bank, Chris Whitmore slapped a price target of $440 on AAPL. “Apple continues to show impressive growth despite its size and is well positioned to benefit from the confluence of three major product cycles, namely: iPad, Macs and iPhone,” he told clients. “These product cycles coupled with greater geographic expansion (Verizon iPhone, iPad 2, iPhone 5, China expansion, Carrier deals) increases our confidence in AAPL’s ability to continue to outperform.”

At Barclays, Ben Reitzes raised his target to $450 from $420 to account for higher unit sales across Apple’s product portfolio. His take on Q1: “This very strong quarterly report left no holes to punch in the fundamental story. We believe the above-consensus revenue and EPS guidance and new products to come bring potential for further upside. We continue to believe the company is in very capable hands with COO Tim Cook and the rest of the team.”

Raising his price target to $450 from $430, Goldman Sachs analyst Bill Shope said essentially the same thing. “While the news of Steve Jobs’ medical leave may continue to add some headwinds to the share price momentum in the near-term, we continue to believe improving underlying fundamentals and the strength of Apple’s overall management team will counter this uncertainty. In addition to the strength of the December quarter and the recent Verizon iPhone release, we believe the next-gen iPad launch and the June iPhone refresh will serve as critical catalysts in the first half of 2011.”

UBS analyst Maynard Um ratcheted his price target up to $465 from $415, predicting what “could be the largest pre-order & sales ever experienced by Verizon Wireless for the iPhone” and continued success for the iPad. Said Um, “Though there has been increasing concern with regard to ramping competition, we see Apple’s ecosystem and ease of use as offering a more compelling value proposition than its competitors today and expect its tablet market share to more closely match its iPod market share in the mp3 player market rather than its share in the more fragmented smartphone market.”

And, finally, there was Ticonderoga’s Brian White, who took a “F@&k Everything, We’re Doing Five Blades” approach and raised his target price to a staggering $550. That’s about 60 percent higher than the price Apple shares have been trading at recently, a target that if the company were to hit, would value it at $506.6 billion. Said White, “Despite Monday’s news regarding Steve Jobs’s medical leave of absence, we believe it will be difficult to keep Apple’s stock from reaching new highs given the much stronger than expected quarter and outlook reported by the company.”

Bullish, or another word with a lot of the same letters? Hard to say. But as you weigh that question, remember this: This is the 33rd consecutive quarter in which Apple has beaten estimates. And this time it beat them by $2 billion.

Unaffiliated analysts, who often do a better job of predicting Apple’s performance than their professional counterparts, are taking an even more bullish view. Bullish Cross’s Andy Zaky–who called Apple’s Q4 EPS almost to the penny–for example, is looking for the company to post a $2 billion top-line beat. He sees Apple reporting $6.29 in earnings per share on approximately $26.3 billion in revenue. That’s quite a bit more than the $4.80 EPS on $23 billion that Apple’s guided for. Is it possible? We’ll find out this afternoon.

The Street won’t like guidance, though: Apple is predicting Q1 EPS of $4.80, below the $5.04 analysts were looking for. They will also sputter a bit on this number: Apple sold 4.19 million iPads, and the consensus was 4.7 million.

And then on the other hand, Apple sold 14.1 million iPhones last quarter, well above both the official 11 million consensus and the 13 million “what we’re really looking for” number.

Ominous/hopeful Steve Jobs quote: “We still have a few surprises left for the remainder of this calendar year.”

UPDATE: Live earnings call coverage here.

Other numbers you care about:

Macs sold: 3.89 million.

iPods sold: 9.05 million.

Press release text:

Apple Reports Fourth Quarter Results
Record Mac, iPhone and iPad Sales
Highest Revenue and Earnings Ever

CUPERTINO, California—October 18, 2010—Apple® today announced financial results for its fiscal 2010 fourth quarter ended September 25, 2010. The Company posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share. These results compare to revenue of $12.21 billion and net quarterly profit of $2.53 billion, or $2.77 per diluted share, in the year-ago quarter. Gross margin was 36.9 percent compared to 41.8 percent in the year-ago quarter. International sales accounted for 57 percent of the quarter’s revenue.
Apple sold 3.89 million Macs during the quarter, a 27 percent unit increase over the year-ago quarter. The Company sold 14.1 million iPhones in the quarter, representing 91 percent unit growth over the year-ago quarter. Apple sold 9.05 million iPods during the quarter, representing an 11 percent unit decline from the year-ago quarter. The Company also sold 4.19 million iPads during the quarter.
“We are blown away to report over $20 billion in revenue and over $4 billion in after-tax earnings—both all-time records for Apple,” said Steve Jobs, Apple’s CEO. “iPhone sales of 14.1 million were up 91 percent year-over-year, handily beating the 12.1 million phones RIM sold in their most recent quarter. We still have a few surprises left for the remainder of this calendar year.”
“We’re thrilled with the performance and strength of our business, generating almost $5.7 billion in cash flow from operations during the quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the first fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $4.80.”

In a research note to clients this week, Whitmore argues that HP (HPQ) needs to work some serious financial magic on Palm (PALM) in order to make it EPS-neutral in 2011. Specifically, the company needs to triple revenue to $1.2 billion and double gross margins to 44 percent while keeping operating expenses flat.

“By all measures, this appears to be a Herculean task given the declining momentum behind WebOS among consumers & developers,” Whitmore writes. “While we do see merit in HP’s strategy to extend WebOS beyond the smartphone market into slates/tablets/etc, the investment required to tap this opportunity may be larger than expected….”

As Whitmore notes, “In reviewing Palm’s financials, Palm spends ~$500M annually in Opex (R&D and sales and marketing) to support the WebOS platform. Given the severe loss of market momentum behind WebOS, we believe it is reasonable to assume that HP will need to grow this investment by 50-100%, to approximately $750 million-$1.0 billion.”

Obviously, a significant investment. That said, HP has so far given every indication that it’s willing to make it. As HP exec Jim Burns emphasized during a conference call last week, the company plans to pump quite a bit of money into Palm.

“We’re going to increase [spending on webOS],” Burns said. “And we’re going to increase sales and marketing as well. We’re going to take this platform, which today exists for smartphones only, and make it much broader than that….We are going to be investing heavily in this business in the next year.”

Yahoo said its net income spiked to $310 million, or 22 cents a share, in the first quarter. Revenue, after subtracting what Yahoo pays in advertising commissions, was $1.13 billion.

Wall Street was expecting earnings of nine cents per share and net revenue of $1.17 billion.

A year ago, Yahoo (YHOO) earned $117.6 million, or eight cents per share.

“We had a good quarter, delivering income from operations higher than our outlook,” Yahoo CEO Carol Bartz said in a statement.

Yahoo benefited from a seven cent per share gain from the sale of Zimbra, as well as cost savings from its newish search and advertising partnership with Microsoft (MSFT).

Removing unusual items, EPS was 15 cents, up 77 percent year over year.

While the profit increase is a good thing, Wall Street is still looking for revenue growth from the Silicon Valley Internet giant and so is Bartz, who has promised increases.

Without taking out the ad commissions, revenue was up just one percent to $1.6 billion.

In any case, it is the best performance under the leadership of Bartz yet, helped by the turnaround in the online advertising industry.

Another strong note: Display ads were up 20 percent year over year, said Yahoo, much higher than analysts’ expectations of about 12 percent. But search growth was down again, this time 14 percent compared with last year.

Yahoo shares declined in after-hours trading, dropping to $17.96 after closing at $18.38.

BoomTown liveblogged the Yahoo earnings call at 2 pm PT.

Here’s the full press release from Yahoo embedded below, as well as the company’s earnings slides and condensed financial information:

YHOO_Q110PressRelease

YHOO_Q110EarningsPresentation_Final –

YHOO_Printalldocuments –

Craig writes in a research note that he still thinks “long-term challenges remain” for Dell (DELL) and its business model.” But he notes that the stock is down 12% since November on skepticism around gross margin. “Low investor sentiment, high short interest, compressed valuation, possible enterprise refresh and likely positive EPS revisions position the shares for better performance in 2010,” he writes.

Read the rest of this post on the original site

Google (GOOG) stock has lurched five percent lower in the first few minutes of after-hours trading, as investors digest the news. If you want to anthropomorphize the market, you might speculate that it’s bummed that CEO Eric Schmidt and company didn’t show a higher revenue lift. But if you’re keeping track, revenue is up 17 percent compared with last year, and up 12 percent from the previous quarter.

Here is Citigroup (C) analyst Mark Mahaney’s “cheatsheet” for those playing at home (click to enlarge):

And you can see the company’s profit and loss and balance sheet here.

Google will be using YouTube to livestream its earnings call, but I’ll be providing some annotation here starting at 4:30 pm Eastern. You can also check out the company’s accompanying slide presentation here, and here’s a chart it’s particularly proud of (click to enlarge):

I’m trying out a promising new liveblog tool, but please bear with me if there are bumps along the way.

On the call: CEO Eric Schmidt, CFO Patrick Pichette, product guy Jonathan Rosenberg, sales boss Nikesh Arora. No Larry or Sergey.

Schmidt declares that he’s very pleased with Q4: “An extraordinary end to a roller coaster year.”

Schmidt: Clearly, we were right to start ramping up investments and will continue to do so. We’re investing in people and investing in tech based on our “70/20/10″ rule: 70 percent in core products, 20 percent in new business like mobile/Android, and 10 percent in “long view” initiatives like commerce and social.

And of course, more mergers and acquisitions. We’re continuing on a pace of roughly one M&A per month, some small, some big.

Pichette runs through the numbers in the release above. He reiterates Schmidt’s line about continuing investments.

Jonathan Rosenberg has a cold, but gets his message across: “We made some very hard decisions” to shut down some products to focus on winners. It’s our “more wood behind fewer arrows approach.” We’re focusing on DoubleClick integration, Android expansion and the Chrome OS. “YouTube, is in fact, monetizing well,” and we hope our partners make money, too.

Obviously, going forward, we’re going to plow resources into search. But other stuff too. Social, for instance. Not just social networking, but all of our products should be “social.” This can apply to search, local search, etc. We’re also focusing on commerce, whether people are making their purchases online or offline.

More Rosenberg: Mobile is important, and so is moving enterprise to the cloud.

Arora: We improved throughout the year, and Q4 was strong. Large companies like Staples (SPLS) and Volvo are directing an increasing portion of spending online [as they're supposed to do].

Arora: Search ads are always a value in December! Costs go up but they get more effective because people buy more.

Arora: Brand marketers are increasing their spending too. YouTube has had many successful brand campaigns. Have you seen Fox’s “Avatar” ads? They’re great. Other shoutouts for Sony (SNE) and American Express (AXP).

Arora: Most of the top networks have signed onto AdX ad exchange since we launched it in the fall.

Time for Q&A.

Google’s U.S. revenue had a big jump, but international revenue did not accelerate as quickly. What gives?

Arora: In the U.S., we saw large advertisers shifting offline to online. Other markets have different issues; hence, the different growth rates.

Are we back to normal in regard to seasonal patterns? Also, can you talk about “materiality” of mobile?

Pichette: We won’t talk about mobile revenue in any concrete way.

Arora: There is some different performance by vertical. Finance, obviously, isn’t as strong as it used to be.

Another question about mobile: Is Google trying to push revenue? Profitability? Also, please talk about China.

Rosenberg: Advertisers are starting to figure out what works on mobile. For instance, adding a phone number or an offer for mobile helps a lot.

Pichette: Regarding mobile, we want to drive innovation that in turn drives people to the Web, which is better for us. That’s the core engine of mobile.

Schmidt: “China stuff has been well-covered in the press,” the CEO notes before recounting the China story. “We’re in conversations with the Chinese government,” and our business has remained unchanged. “But in a reasonably short time, we’ll be making some changes there.” That said, we’d still like to be in China.

Missed a question. Apologies.

Please talk about outperformance of network business vs. owned and operated. Also, what accounts for higher marketing costs?

Pichette: Nothing to talk about re: network versus O&O. Re expenses, we said we were going to ramp up investment and we put in more there because we can track the results and the return on investment.

Arora: Yep, some of that money was to support consumer launches.

You said search increased five times on mobile. So what does that mean for revenue per search? Also, please talk more about increased spending on marketing.

Pichette: We’re really pleased with the marketing experiments we’re running.

Rosenberg: Regarding mobile, the new formats, targeting tools and reporting we’re giving mobile advertisers is making a huge difference. But I won’t answer your question about revenue.

Missed another question here.

YouTube monetization: Can you give us some metrics on how much inventory you’re selling?

Arora: Nope. But it has “gone from being a nice-to-have” to essential.

Pichette: The Youtube homepage nearly sold out in Q4. Hope that’s useful.

Can you break out ad spending by advertiser size?

Arora: Large advertisers are moving online, which is good. Retail was strong in Q4. We’re working with smaller advertisers to “bring them into the fray.” But the discrepancy so far has been mainly seasonal.

Can you rank your core businesses in terms of growth potential? Also, what’s up with you and Apple (AAPL)?

Schmidt: We’ve been saying for a while that display is a big opportunity. One story you haven’t seen so far is how successful we’ve been in display, but that will come out in 2010. [Note to PR staff: Start pitching!]

And obviously, mobile is small now but will grow quickly.

“With respect to Apple, it’s probably better to say”…that as a former board member “I have a special spot for Apple in my heart.” They’re a very well run company and “they have some very good stuff coming” strong competitor, etc.

Schmidt on Nexus One: What it is really about is a new way of buying a phone. Nexus One itself is the first in a series of examples where you can buy the phone online and pick your carrier.

Is Bing having an impact on cost per click?

Rosenberg: We think out CPCs are generally not affected by competitors. Prices are set by buyers.

Can you talk about Nexus One’s impact on margin?

Pichette. Not really. We want to innovate, etc. Nexus One will have its own margin and that’s how we’re focused on building the business.

We’ve seen third-party data on mobile projecting that iPhone could account for 50 percent of mobile traffic. Does that make sense to you? Also, you have said that the Apple relationship is “stable.” So what are the odds that you’re going to continue to provide search on the iPhone?

Schmidt: We won’t talk about the market share of Apple. And we won’t “speculate about any deals of any kind–true, not true, rumored, not rumored.”

Given that new display products are so great, is there any notion that people are moving dollars from search to display?

Schmidt: Advertisers “don’t shift, they add.” They might maximize search to maximize revenue and they might spend on display for long-term growth, branding, etc.

Pichette thanks Googlers listening for all their hard work. There’s an auxilary call at 6 pm Eastern with Pichette and Rosenberg, but I won’t be able to cover that one.

This year, says Barclays analyst Douglas Anmuth. He predicts that the video site will see revenue jump 55 percent, to $700 million, in 2010, and that it will “start contributing positively” to the Google’s earnings.

Why? Because YouTube is ginormous, of course. But also because the company has become more sophisticated about advertising. (Note that Google content guru David Eun said much the same thing when I talked to him last month, specifically citing the Google’s integration of DoubleClick).

Here’s the relevant part of Anmuth’s note:

Perhaps the main take-away for Google’s display business is that in 2010 we believe YouTube will start contributing positively to EPS. An improving advertising environment certainly helps, but with YouTube monetizing more than 1 billion video views every week, and with strong sell-out rates on its home-page from larger advertisers–we note 90% of the top 50 Ad Age have advertised on YouTube–we believe the site can profitably take share of the branded display & video market. We project YouTube to generate $700 million in revenue in 2010, up 55% Y/Y. Usage continues to grow. In November the total number of YouTube’s videos viewed grew 139% to 12.2 billion in November and unique visitors grew 32% Y/Y to 129 million. As a comparison, Hulu, the second most popular video site by videos viewed according to comScore, recording 923 million videos viewed.

Of course, the standard caveats that Google (GOOG) uses when people generate less flattering estimates for YouTube also apply here. It’s very difficult to get a handle on how many pages/views Google is selling and how much it gets for each one. It’s also tricky to guesstimate how much Google is spending to serve more than a billion video streams a day. So at best, this is an educated guess.

Still, it will be interesting to see if Google concurs with Anmuth. We’ll hear from Eric Schmidt et al in a week when the company reports fourth-quarter earnings.

In a research note issued this morning, Huberty–noting that the iPhone’s market share grew 136 percent in France when Apple switched to multicarrier agreements there–said iPhone sales could more than double if the company took a similar tack in other countries.

“We expect Apple to broaden iPhone carrier distribution over the next two years and believe this opportunity is under-appreciated by the investment community,” she wrote. “This total opportunity is substantial–it adds up to an incremental 20.3M iPhone units and $3.76 in adjusted EPS, 100 percent and 41 percent of iPhone units and adjusted EPS respectively.”

Adding further details to her projections, Huberty continues: “In the top six iPhone markets that are still exclusive, we believe that Apple’s market share could rise to 10 percent, on average, in a multiple carrier distribution model from 4 percent today. These six markets represented almost 70 percent percent of iPhone shipments in C2Q09.”

Huberty also claims that if Apple (AAPL) were to end its exclusivity deal with AT&T (T) and add Verizon (VZ) as a second carrier, its share of the U.S. market would more than double, rising to 12.2 percent from 4.9 percent today.

Huberty, it should be noted, isn’t the first analyst to make such a claim. In June, Bernstein Research analyst Toni Sacconaghi said that a deal with Verizon could more than double U.S. iPhone sales in the near term. Said Sacconaghi: “Verizon’s postpaid subscriber base is not only larger than AT&T’s, but more importantly, is untapped whereas we estimate more than 10 percent of AT&T’s postpaid users already have an iPhone.”

“None of us want to go into that creative hoo-ha of a long-play record again. Not straight off,” said Radiohead frontman Thom Yorke, in an interview with the Believer. “I mean, it’s just become a real drag. It worked with ‘In Rainbows’ because we had a real fixed idea about where we were going. But we’ve all said that we can’t possibly dive into that again. It’ll kill us.”

Read the rest of this post on the original site

Earnings were $2.32 per share, up from $1.97 per share in the same period last year, and well above the $2.02 per share the Street was looking for. Sales were $23.25 billion, lower than the $23.59 billion predicted by analysts, but second-quarter net income was $3.1 billion, up 12 percent year-over-year.

IBM, it seems, is generally weathering the econalypse pretty well (investor presentation). Indeed, the company raised EPS guidance for the full year, saying it now expects to earn at least $9.70 per share this year, compared to its previous forecast of $9.20. (Click on Highlights summary below to enlarge.)

“As a result of our strategic transformation, we have a very strong business model that is delivering superior earnings, cash, and client value,” said IBM CEO Sam Palmisano in a statement. “We are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers.”

I guess IBM’s practice of sacking U.S. employees and shifting their jobs to lower-cost countries is serving it quite well in this souring economy.

IBM (IBM) shares, which are already up more than a quarter this year, rose another 2.1 percent to $112.93 on the news.

At first glance, it looks like the company beat them. Netflix (NFLX) posted earnings of 37 cents a share on revenue of $394.1 million. Wall Street had been looking for 31 cents and $390 million, respectively. The company said it ended the quarter with 10.3 million subscribers, which is the high end of the range it had promised to deliver.

And guidance was strong, too. From the company’s press release, here are Q2 predictions:

– Ending subscribers of 10.4 million to 10.6 million
– Revenue of $403 million to $409 million
– GAAP net income of $27 million to $32 million
– GAAP EPS of 44 cents to 53 cents per diluted share

And here’s the company’s revised guidance for 2009 (full year), which it increased:

– Ending subscribers of 11.2 million to 11.8 million, up from 10.6 million to 11.3 million
– Revenue of $1.63 billion to $1.67 billion, up from $1.58 billion to $1.635 billion
– GAAP net income of $96 million to $106 million, up from $88 million to $98 million
– GAAP EPS of $1.56 to $1.72 per diluted share, up from $1.43 to $1.59 per diluted share.

All of this seems to compare favorably with Wall Street’s expectations. Via Citibank’s Mark Mahaney, here’s what investors were looking for (click to enlarge):

Netflix shares have been bouncing around in the aftermarket following the earnings release, and last I looked, they’re just about flat. It will probably take investors a while to figure out if they’re disappointed that the numbers aren’t even bigger.

UPDATE: The stock is now down around 5%, presumably because guidance wasn’t strong enough. I’m back for the earnings call, which I’ll live blog part of: I’m particularly interested in Netflix’s digital strategy, so I’ll be focusing on that.

CEO Reed Hastings: Subscribers renting more DVDs and Blu-rays than ever. Disc rental will continue to grow for many years, so we’re investing in that.

More realistic Blu-ray pricing (previously discussed) of 20% to 25% premium for subs. Though we’re paying the studios a higher premium for Blu-ray. If we can get those costs in line, we can promote Blu-ray more agresssively [i.e. bring down your prices, Hollywood, and we'll push more of your high-margin discs].

We are losing customer to $1 kiosk rentals. “By end of they year, kiosks will likely be our #1 competitor,” as rental stores fail. “Longterm effects,” of cheap kiosks “are not positive for us, or the industry as a whole.”

Streaming: Overall consumer embrace of online video growing. “Not hard to believe that online video will grow substantially every year for a long time”. [Duh]. Important for us to be spending “aggressively” on streaming content. “But that means we are essentially buying many titles twice now”. Buying once on DVD, and again on streaming. Great for content owners, ok for us since costs for streaming are lower than physical distribution.

We believe we’ll get more streaming licenses as TV networks, who control titles, look to increase distribution. We are looking to a day, when we have plentiful content for streaming… “we will simply be a fourth option for consumers and a fourth revenue source for networks and studios”. It’s possible that within a few years, all CE devices sold will include a Netflix component.

It’s easy to focus on the Internet for its distribution abilities, but its important to think about social possibilities. Future of Internet TV is closer to Facebook and social networks than the standard grid lineup. Social, social, social. Long term outlook for Internet TV is very promising.

[Join to pass on most of CFO notes] No “cocooning” effect from recession apparent in DVD usage. Acquisition costs “record low” in part because of depressed online ad pricing.

Q&A: “Tremendous amounts” of hardware partnerships in the pipeline. Xbox renewal? No answer.

Have sub growth slowed at end of quarter? No. Q4 growth back-end loaded because of holidays, and Q1 growth front-end loaded for same reason.

How about a fee-based service for a streaming only service by year’s end? We talk about that from time to time, but not pressing. For now, combination of DVD rental and streaming is what consumers are interested in. A streaming-only service would be a “sweetner” to what we have now. We don’t think it would cannibalize, though.

Can you talk about streaming-enabled devices’ contribution to subscriber additions? No details, but we think it’s helpful to have Xbox, Blu-ray players, etc. “It’s definitely a very positive part of the ecosystem for us”.

What are dynamics to adding more content to streaming library? More money.

Can you talk more about new marketing efficiencies? There aren’t any new ones, really. Weak economy, lower ad prices, plus consumer excitement about streaming product.

What does competition look like on streaming front from Apple and Amazon? Right now, “all three of us are three drops of water in the pool that is watching television”, … “we all recognize in the long-term there will be competition between us” but we’re all “so tiny” compared to TV-viewing that that’s what we’re focused on.

That appears to be it for streaming-related queries. I’ll check back in with the full transcript later on.

Next up: The company’s earnings call, where investors will be looking for more information about a product line refresh, Steve Jobs’s health and any other info the typically closemouthed company dribbles out. I’ll be covering that live at a separate post at 5 p.m. Eastern.

Relevant unit sales: “Apple sold 2.22 million Macintosh computers during the quarter, representing a three percent unit decline from the year-ago quarter. The Company sold 11.01 million iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 3.79 million representing 123 percent unit growth over the year-ago quarter.”

Here’s what that looks like if you break it down (click to enlarge):

Earlier today, AT&T (T) said it had shipped 1.6 million iPhones this quarter, down a bit from the previous three months.

Here, from Silicon Alley Insider’s Dan Frommer, is what the Street was looking for:

• March quarter revenue: $7.69 billion consensus (6% y/y growth)
• March quarter EPS: $1.09 consensus
• March quarter GM: 32.5% guidance, 33.6% RBC estimate
• March quarter Mac shipments: 2.1 million consensus
• March quarter iPod shipments: 10 million consensus
• March quarter iPhone shipments: 3.3 million consensus (some analysts at 3.7 million)
• June quarter revenue: $8.28 billion consensus (11% y/y growth), guidance could be $7.8-$8.1 billion
• June quarter EPS: $1.12 consensus, guidance could be 92 cents-$1.02
• June quarter GM: 33% consensus, guidance could be 30.5%-31.5%

Press release excerpt:

CUPERTINO, Calif., April 22 /PRNewswire-FirstCall/ — Apple® today announced financial results for its fiscal 2009 second quarter ended March 28, 2009. The Company posted revenue of $8.16 billion and a net quarterly profit of $1.21 billion, or $1.33 per diluted share. These results compare to revenue of $7.51 billion and net quarterly profit of $1.05 billion, or $1.16 per diluted share, in the year-ago quarter. Gross margin was 36.4 percent, up from 32.9 percent in the year-ago quarter. International sales accounted for 46 percent of the quarter’s revenue.

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone(TM) and Apple TV® over their estimated economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $9.06 billion of “Adjusted Sales” and $1.66 billion of “Adjusted Net Income.”

Apple sold 2.22 million Macintosh® computers during the quarter, representing a three percent unit decline from the year-ago quarter. The Company sold 11.01 million iPods during the quarter, representing three percent unit growth over the year-ago quarter. Quarterly iPhone units sold were 3.79 million representing 123 percent unit growth over the year-ago quarter.

“We are extremely pleased to report the best non-holiday quarter revenue and earnings in our history,” said Peter Oppenheimer, Apple’s CFO. “Apple’s financial condition remains very robust, with almost $29 billion in cash and marketable securities on our balance sheet. Looking ahead to the third fiscal quarter of 2009, we expect revenue in the range of about $7.7 billion to $7.9 billion and we expect diluted earnings per share in the range of about $.95 to $1.00.”

Apple will provide live streaming of its Q2 2009 financial results conference call utilizing QuickTime®, Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on April 22, 2009 at www.apple.com/quicktime/qtv/earningsq209/ and will also be available for replay for approximately two weeks thereafter.

For the quarter, the last large national electronics retailer posted revenue of $14.724 billion, a bit below the Street consensus at $14.8 billion. But adjusted EPS of $1.61 a share nicely beat the Street at $1.40 a share. (In the release, Best Buy says the Street had been expecting $1.38. But whatever.) Comparable store sales were down 4.9 percent in the quarter, but gross margin improved to 24.6 percent from 23.7 percent a year ago.

For 2010, the retailer sees revenues of $46.5 billion to $48.5 billion; the Street has been forecasting $48.1 billion.

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“Due to the current macro-economic conditions and limited visibility, EMC is not offering revenue, EPS or other financial outlook at this time, the company said in a statement. “EMC’s best estimate is that 2009 global IT spending will decline as a percentage in the mid to high single digits compared with 2008. The company expects the markets that it addresses will perform slightly better than the overall IT market. The company also expects that a higher than usual percentage of the full-year IT spending will take place in the second half of the year.”

There’s still no official printed notice from Netflix. You can see the company’s comments in an interview Bloomberg conducted on Friday.

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Chin today cut EPS estimates by about 10 percent for 13 global solar companies, including SunPower (SPWR), Evergreen Solar (ESLR), LDK (LDK), Suntech (STP), Yingli (YGE), Q-Cells, Solarworld, REC, Conergy, Solon, Motech, E-Ton and Sino-American Silicon. He also cut his rating on SunPower to Neutral from Buy, while increasing his rating on Energy Conversion Devices (ENER) to Buy from Neutral.

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For the quarter, the company posted revenue of $67.0 million and non-GAAP EPS of 36 cents; the Street had expected $66.85 million and 35 cents.

For Q3, the company sees revenue of $63 million to $65 million, with non-GAAP profits of 30-36 cents a share; the Street had been expecting $63 million and 32 cents. For the full year ending in November, the company sees revenue of $263 million to $275 million, with profits of $1.50 to $1.70; the Street consensus has been $269.1 million and $1.54.

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