Apple Q1 net rises 78%, but forecast disappoints
By Agencies |
Highlights
SAN JOSE: With the iPod juggernaut still soaring, Apple reaped record profits during the holiday quarter and stands to remain a Wall Street darling despite issuing a second-quarter forecast that fell below analyst expectations.
���Their guidance is always conservative,��� Piper Jaffray analyst Gene Munster said. ���It���s a bunch of hoo-ha.��� Apple didn���t disappoint during its last quarter and easily topped analyst targets. For the final three months of 2006, profits surged 78% after the company sold a record 21 million iPod players, or about 50% more than it did in the same period the year before.
That���s an iPod sold for nearly every person in Texas. Sales of the iconic device accounted for $3.43 billion, or nearly half, of the company���s total revenue for the quarter. Apple also shipped 1.6 million Macintosh computers, up 28% from the year-ago holiday season.
The Mac sales growth rate was more than triple that of the overall PC industry for the period, according to market research firm IDC. Apple���s share of the PC market in the US also grew to 4.7% in the quarter, up from 3.6% a year ago, IDC said. ���Apple is clearly at the top of its game right now,��� said analyst Samir Bhavnani at Current Analysis.
During its fiscal first quarter ended December 30, the Cupertino-based company said it earned $1 billion, or $1.14 per share, compared with $565 million, or 65 cents a share, a year earlier. Revenue for the quarter hit a record, reaching $7.1 billion, up 24% from $5.7 billion the previous year. ���This one was for the record books,��� Apple CFO Peter Oppenheimer said.
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Looking ahead to its fiscal second quarter, Apple forecast revenue of $4.8 billion to $4.9 billion and earnings per share of 54 cents to 56 cents. Analysts were projecting revenues of $5.2 billion and earnings per share of 60 cents. Apple officials said the March quarter outlook partly stems from expectations of slightly lower gross margins and slower software sales ahead of the company���s spring release of its upgrade to the Mac OS X operating system, dubbed Leopard. Analysts took the company���s guidance with a grain of salt. ���Last time they beat their own guidance by 16%,��� Mr Munster said. ���And it���s undeniable now that they���re running away with the digital music market.��� Despite new competition from Microsoft���s Zune player, Apple said its line of iPods managed to hold onto a 72% share of the US market in December.
Legal troubles for Apple are mounting, but Wall Street so far has largely shrugged off the impact. Apple is one of the most prominent among dozens of companies facing federal scrutiny over its past accounting of stock options. Cisco Systems also have sued it over alleged trademark infringement for using the name iPhone for the new cell phone-iPod device it unveiled last week.
Apple COO Tim Cook called the Cisco lawsuit ���silly��� during a conference call with analysts Wednesday and said Cisco���s trademark registration was ���tenuous at best���. ���If Cisco wants to challenge us,��� Mr Cook said, ���we���re confident we���ll prevail.��� Investors are optimistic about Apple���s future as it reinvents itself as a maker of consumer electronics.
The company even changed its name last week ��� from Apple Computer to just Apple��� to better reflect its broadening portfolio beyond computer products. After Apple CEO Steve Jobs introduced the long-anticipated iPhone last week, Apple shares briefly reached an all-time high of $97.80 during trading before closing up 4.79% at $97 that day.
Apple also unveiled Apple TV, a new set-top box that sends video from computers to the television. Due to be available in February at a price of $299, Apple TV could be a ���surprise hit���, American Technology Research analyst Shaw Wu said.
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