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"Boom"

Jul 21, 08 - 04:40 pm Comment from: Jubei

Real earnings from hard work and innovation. Unlike that other company that relies on its monopoly to generate its income.

Jul 21, 08 - 04:40 pm Comment from: ChrissyOne

...and the stock plummets.

Thanks, Steve.

Wow, 2.5 million Macs sold last quarter and it wasn't even back to school sales time yet!

Jul 21, 08 - 04:43 pm Comment from: MacDave

"mooB"

Wow, almost 2.5 million Macs shipped! Wonder how conservative their guidance will be for this quarter and how bad the Street will punish them for it? With the runaway success of iPhone 3G it can't be that conservative.

Jul 21, 08 - 04:44 pm Comment from: MikeK

" Gross margin was 34.8 percent, down from 36.9 percent in the year-ago quarter."

----------------

This is what the analysts won't like.

Next "concern" on wall street will be Apple's large cash holdings and what to do with it . That should drive the stock down a bit. Seriously, us who know the products and enjoy our computers (for me, a switcher 5 yrs ago, apple made computers fun again) keep buying when the stock is low. 3-5 yrs from from now, it'll be att 500.

now maybe they can give some of that profit to us suckers who plunked down $99 on a barely working .me service..

Now I believe when people say Mac sales are through the roof... this is impressive.
If this company keeps that same growth rate for the Mac for the next 5 years... wow.
Because if the next 5 years are like the last 5, it means double digit market share worldwide.

And the stock is down over 7 points...

rob, you can start bitching when it isn't working during a month you are actually paying for.

"And the stock is down over 7 points..." - Blue Dream

Great my friend, and hopefully it'll go as down as 100 points
We don't mind, the fundamentals are all there... so no worry
In time it'll rise so high some would regret not holding it now

I have officially lost all confidence in the analysts. Apple has another incredible quarter and the stock dives. I don't have shares and I guess I should not be too concerned.

Apple is probably thinking they should take the company private with a few big investors and forget all these conference calls on earnings.

Last quarter (Q2), AAPL's revenues were higher than expected, while gross margin was lower than expected. This had many analysts concerned -- when revenue goes up, profits should go up too.

This quarter (Q3), the reverse holds true. AAPL reported a gross margin of 34.8%, which is higher than both AAPL's stated guidance of 32.9% and street expectation of 33.6%.

This unexpected upside in the gross margin is what's keeping the stock from plummeting even further than it did.

The conference call should be enlightening in terms of AAPL's setting analyst expectations as to gross margin trends for next quarter (Q4).

"We're busy finishing several more wonderful new products to launch in the coming months". Now that is interesting. I presume he means truly new, and not just updated...

Jul 21, 08 - 04:58 pm Comment from: jimmymac

and we're busy finishing several more wonderful new products to launch in the coming months."
-Steve Jobs
Yep.
That's what he said.

At 16:59 ET, just before the conference call begins at 17:00 ET, AAPL is trading at $156.10, having made a post-earnings after hours low of $156.00.

AAPL shares have declined after earnings because although the quarter's metrics were all strong, AAPL's guidance for Q4 was lower than analysts were expecting. Yes, AAPL is notoriously conservative in this future guidance, but this Q4 guidance was even weaker than it usually is.

We'll see if the conference call can shed any light on what's going on.

" I have officially lost all confidence in the analysts. Apple has another incredible quarter and the stock dives. I don't have shares and I guess I should not be too concerned."

That's because you don't understand anything about business. Apple is predicting a pretty lousy quarter (as they always do) for the 4th quarter..

"Apple said it expected fourth-quarter earnings of $1.00 per share and revenue of $7.8 billion, compared with average Wall Street targets of $1.25 earnings per share and $8.3 billion revenue, according to Reuters Estimates."

The analysts are 100% correct and based on Apple's own projections, the stock ought to drop light a rock.. And the price drop is Apple's fault, not "the analysts"...

Did anybody else see the last bit of Steve's quote?

"...and we're busy finishing several more wonderful new products to launch in the coming months."

I wonder what he has up his black turtleneck sleeve.

At 17:02 ET, AAPL's conference call has now started.

AAPL is currently trading at $156.97.

Jul 21, 08 - 05:04 pm Comment from: BiZarRo BaLlmEr

...and we're busy finishing several more wonderful new products to launch in the coming months."


New iPods? Waiting on a touch.

AAPL CFO Peter Oppenheimer is going over the quarterly results, highlighting AAPL's strong growth rates.

Operating margin at 18.6% was higher than expected due to higher revenue and gross margin than expected.

"We are very proud of these results", he says.

These kinds of comments are seen as cheerleading by analysts and are not impressing the market.

As of 17:06, AAPL is currently trading at $156.20. AAPL just made modest new lows of $155.78.

Jul 21, 08 - 05:06 pm Comment from: ElderNorm

@MikeK
"" Gross margin was 34.8 percent, down from 36.9 percent in the year-ago quarter."

----------------This is what the analysts won't like."

Mike, the analysts are idiots. Period. Apple has gross margins 2-3 times what HP and Dell have. No race to the bottom here.

Yet that is not good enough??? Lets see an analysts run a company....... OH,.............wait. . . . . . . . .. . there is a big case of that happening.

Microsoft. Biggest anal-----yst running the company. And they were great this week. They JUMPED from 25.2 to 25.7. FIFTY whole CENTS. The WOW starts now.

Hey, at least its called the stock (yard) market, not the brains market. . . . . .

Just a thought.

en

Jul 21, 08 - 05:08 pm Comment from: Too Hot!

2,496,000 MAcs
Better than both the Gartner and the IDC estimates. Market share was underestimated by both!

Technical difficulties - Temporarily lost connectivity to the conference call.

AAPL CFO Peter Oppenheimer is reminding analysts that AAPL stopped recognizing iPhone revenue from March (when it first announced the iPhone 2.0 firmware upgrade) to July 11 when it first shipped the iPhone 2.0 firmware.

As of 17:11 ET, AAPL is currently trading at $155.72. AAPL just made new lows of $155.56

Jul 21, 08 - 05:12 pm Comment from: Sir Gill Bates

"...and we're busy finishing several more wonderful new products to launch in the coming months."

I hope it's nothing dealing with the iPhone, fer cryin' out loud.

Gross margin was 34.8% because:

1. Net benefit of 70 basis points of contractor deferred margin.
2. Better commodity evironment, better revenue mix, and greater than expected revenue.

Tax rate was lower than guided due to foreign tax benefits.

Cash growth is higher than earnings due to deferred revenue from iPhone subscription accounting.

Guiding gorss margin 31.5% for Q4, down from 34.8% in Q3 due to:

1. Full quarter of back to school promotion
2. Future product release (not to be discussed now)
3. Margin trueup from contractor earlier reported for Q3

As of 17:11 ET, AAPL is currently trading at $155.09. AAPL just made new lows of $154.66.

(Correction: My previous comment was posted at 17:15 ET, not 17:11 ET.)

Peter Oppenheimer's comments have ended. Q&A;has started.

Oppenheimer says: "If iPhone sales were recognized as sold [as opposed to subscription accounting], Q4 revenue would be significantly higher."

As of 17:18 ET, AAPL is trading at $34.

i've been a .mac (iTools) paying customer from the inception. I have the right to bitch. f*ck off.

Swell, more cash. And now... Let's buy Adobe!

Do you think that resolution independence is one of the seven new and wonderful products? After all it has been two years that Apple promised this, too.

"we're busy finishing several more wonderful new products to launch in the coming months"

Like Snow Job Leopard, Apple will be bringing out an iPhone with No New Features, Several iPods with No New Features and refreshing the entire Mac product line with new systems with No New Features.

Fanboys are instantly expected to applaud the upgrades and start buying them immediately. Anyone who points out the the the emperor has no clothes and refuses to upgrade will have their Mac Fanboy card revoked.

(Correction: As of 17:18 ET, AAPL was trading at $155.34, not $34!)

Positive comments by CFO Oppenheimer and COO Tim Cook seem to have stopped the slide in the stock, at least for now.

As of 17:23 ET, AAPL is trading at $155.76.

Beyond Q4, CFO Peter Oppenheimer says: "We are delivering state of the art products at price points our competitors can't match. ... We intend to continue this strategy," but not at such high margins to give competitors an opening.

As of 17:26 ET, AAPL is trading at $155.50.

Jul 21, 08 - 05:29 pm Comment from: lee

I want Rob Enderle to call in and ask some questions.

AAPL CFO Oppenheimer declines to comment on SJ's health, saying it "is a private matter". The analyst was very apologetic for even raising the issue.

No mention of any succession plan.

This has spooked the market. As of 17:29 ET, AAPL is trading down to $152.00, having made new lows of $151.21.

As expected! The so called experts are driving down the price because they get paid on the buy and the sell. The apps store is going to be a cash cow for AAPL and the investment community hasnt fully absorbed the profit margin Apple will realize yet. They are focusing primarily on the Mac. $250.00@ share by springtime is a good bet.

In response to a question, Oppenheimer answers that the iPod touch revenue is recognized when sold.

The iPhone revenue is treated differently because software features were announced in advance of them being shipped.

Oppenheimer again references new product launches that "competitors can't match", which of course he can't talk any more about.

As of 17:34 ET, AAPL is trading at $150.50, having made new lows of $150.00.

Yet another reference to "being excited about products in our pipelines".

Analysts are repeatedly asking about gross margin and operating margin.

Oppenheimer reminds analysts that Q4 guidance represents 35% revenue upside on a year-over-year basis. "Investing in the business" and "providing operating leverage" in the earnings.

As of 17:38 ET, AAPL is trading at $151.11.

Jul 21, 08 - 05:39 pm Comment from: Galloway

Stock market = gambling

Anyone who says they really understand why a stock went up or down is deluding themselves and trying to fool you.

Just 700k sold iPhones???.. that's pathetic even if you take into account that the 3G was coming, can this figure really be right, maybe a "1" should be prepended to that figure hmof

Tim Cook sees channel outlets "continuing to increase".

On enterprise, 1/3 of the Fortune 500 were in the iPhone 2.0 beta program. Lists a number of them, including Kraft, Oracle, and others, and also says they are writing applications on the iPhone App Store.

Also says carriers have substantial sales forces that can help reach enterprise customers.

As of 17:42 ET, AAPL is trading at $149.34, having made new lows of $148.99.

Oppenheimer says the App Store will make the iPhone and iPod touch more attractive, in the same way that iTunes makes the iPod more attractive.

As of 17:46 ET, AAPL is trading at $148.60, having made new lows of $148.30.

Jul 21, 08 - 05:47 pm Comment from: Brau

The stocks dropping is fully expected as many holders only wanted to invest until the iPhone3G hit the market (short term predictable gains).

Oppenheimer says the economic environment hasn't been impacting Q3 results, and will leave economic commentary to others. AAPL has taken the economic situation into account when providing Q4 guidance.

AAPL shares continue their free-fall after AAPL execs refused to comment on SJ's health.

Analyst is grilling AAPL execs on logistical issues around iPhone launch.

As of 17:50 ET, AAPL is trading at $148.30, having made new lows of $147.86.

Analysts question whether AAPL can maintain its competitive advantage, given the crowded market.

Apple COO Tim Cook refers to the software as being "light years ahead", and welcomes competition as long as it doesn't infringe on AAPL's intellectual property.

AAPL CFO Peter Oppenheimer chimes in that the iPhone App Store is a key differentiator.

Then yet another analyst questions AAPL's ability to maintain growth rates. Tim Cook says he believes there will be "a shift in the industry to more and more people wanting a smartphone than a standard voice phone".

Tim Cook says the recent change in iPhone business model helps overcome the price objections that AAPL found in potential customers, who told AAPL they would buy the phone, but not at the $400+ price points.

Tim Cook reaffirms AAPL's goal to sell 10 million iPhones in calendar year 2008.

As of 17:56 ET, AAPL is trading at $149.52, having risen on short covering, after having made new lows of $147.60.

AAPL CFO Peter Oppenheimer all but confirms that there will be a "product transition" in Q4, which he says will affect Q4 gross margins.

Note that he referred to a "product transition", not "product launch".

AAPL CFO TIm Cook says PC sales were expected to grow 5%, but AAPL's revenue went up by 23%.

As of 17:56 ET, AAPL is trading at $149.30.

(Correction: Previous update was as of 18:00 ET, not 17:56 ET.)

Call has ended. As of 18:02 ET, AAPL is trading at $148.75.