PDA

View Full Version : Apple's Q2 2006 Financial Results


MacRumors
Apr 19, 2006, 04:22 PM
http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

Apple reported (http://www.bloomberg.com/apps/news?pid=10000103&sid=a2Skp1Y.djTA&refer=us) on 2nd Quarter 2006 Financial Results today.

Apple's profits rose 41% this quarter with net income up to $410 million or 47 cents a share, from $290 million, or 34 cents, a year earlier.

Apple shipped 1,112,000 Macintosh® computers and 8,526,000 iPods during the quarter, representing 4 percent growth in Macs and 61 percent growth in iPods over the year-ago quarter. “We’ve generated over $10 billion in revenue and almost $1 billion in earnings in the first half of fiscal 2006,” said Steve Jobs, Apple’s CEO. “Our transition to Intel processors is going very well, and our music business just experienced another quarter of outstanding growth.”

Apple's financial results webcast is ongoing.

sososowhat
Apr 19, 2006, 04:24 PM
Looks like pretty good results overall, but they're a little defensive about the 4% increase in Mac sales -- lots of blame assigned to the Intel transition.


"Apple shipped 1,112,000 Macintosh® computers and 8,526,000 iPods during the quarter, representing 4 percent growth in Macs and 61 percent growth in iPods over the year-ago quarter."

bommai
Apr 19, 2006, 04:24 PM
Hopefully the 2nd half is great and helps bring the stock up more! I have vested interest :-)

revjay
Apr 19, 2006, 04:28 PM
How long will the ipod grow like this?

runninmac
Apr 19, 2006, 04:28 PM
"Again... we wont comment on unrealised products*." :mad:

Well I couldn't really expect them to but I hope its soon...

* from webcast

LimeiBook86
Apr 19, 2006, 04:29 PM
"We will not comment on un-rleased products" Dammit! :p Hahaha

Oh well, maybe they'll slip up, I'll keep listening...:D

skunk
Apr 19, 2006, 04:29 PM
I would imagine that 4% represents a loss of market share, if anything.

WildCowboy
Apr 19, 2006, 04:29 PM
Oppenheimer says they expect iPod units to be down slightly next quarter...the growth curve seems to be flattening. To be expected...it certainly can't continue forever.

Duplicating this quarter's iPod sales would bring year-over-year growth to under 40% for next quarter from 61% this quarter.

rye9
Apr 19, 2006, 04:30 PM
It's nice to see Apple doing so well considering the comapny's past.

Grimace
Apr 19, 2006, 04:33 PM
People stopped buying iBooks. That's one reason mac sales were a bit slower. From a quarterly perspective, it makes great sense the way Apple has smoothed out its product updates:

Q4: Holiday rush, iPod sales carry the company
Q1: MacBook Pro, MacMini, and iMac sales help get the transition going
Q2: MacBook and 17" MacBook Pro continue the transition
Q3: Powermac (intel) updates complete the transition + 10.5 Leopard preview
Q4: New iPod in time for holidays (10.5 available for purchase too?).

This always gives investors something to look forward to instead of just updating everything at once and hoping that an effect is immediately visible.

Chris Bangle
Apr 19, 2006, 04:34 PM
Why was there no mention of 50 million ipods being sold..... Seems like a keynote is due (Sunday)

Sunday better be good.

Rocketman
Apr 19, 2006, 04:35 PM
The article states this is the first time Windows is allowed to run on Macs.

Nope. Apple "allowed" VPC for years.

Mitch1984
Apr 19, 2006, 04:36 PM
People stopped buying iBooks. That's one reason mac sales were a bit slower. From a quarterly perspective, it makes great sense the way Apple has smoothed out its product updates:

Q4: Holiday rush, iPod sales carry the company
Q1: MacBook Pro, MacMini, and iMac sales help get the transition going
Q2: MacBook and 17" MacBook Pro continue the transition
Q3: Powermac (intel) updates complete the transition + 10.5 Leopard announced?
Q4: New iPod in time for holidays (10.5 available for purchase too?).

This always gives investors something to look forward to instead of just updating everything at once and hoping that an effect is immediately visible.

Exactly what I thought. I believe this will end up being true.

ChrisA
Apr 19, 2006, 04:37 PM
"4 percent growth in Macs" Wow. Who would have guessed that? I would have predicted a decline in sales. I had figured that everyone was doing like me and putting off buying a new Mac until 2007 and the dust settles. I predict '07 will be ahuge year for mac sales.

But 60+ percent growth in iPod sales is not sustainable. At that growth rate it will not be long before the entire surface of the Earth is covered 10 feet deep in iPods. No kiddding. Expnential growth works like that. Really, if trends continue in 20 years many of us will be crushed by the weight of stacks of iPods. So I guees "trends will not continue."

Peace
Apr 19, 2006, 04:38 PM
"We've seen a lot of interest in Boot Camp but we can't tell you the number of downloads since it just came out 2 weeks ago and is in Beta"

rdowns
Apr 19, 2006, 04:39 PM
Wall Street is happy. Apple usually tanks after earnings announcements.

Symbol: AAPL
Last Trade: 68.83 5:37PM ET
After Hours Change: 3.18 (4.84%)

Applespider
Apr 19, 2006, 04:40 PM
Bear in mind that while they took lots of Macbook Pro orders, there were delays in getting stock and shipping them. It's only recently gone to 24 hour availability in the Apple store. That probably didn't help the Mac figures.

hoppo99
Apr 19, 2006, 04:40 PM
4% increase in Mac sales is pretty good considering the Intel transition. Most of Apple's customers are repeat buyers who would most likely be postponing purchases until the new (intel) model is out. I don't think it is impacting potential switchers (at least in a negative way) since most aren't even aware what a processor is, let alone what one the Mac they're buying has! I wonder what the increase in PC sales is in the industry as a whole for the last quarter? It's probably more than 4% but I wouldn't reckon by much.

Mars
Apr 19, 2006, 04:40 PM
Am I the only one to consider Steves' statement of "...music business..." being a rather risky "naming" in respect to the ongoing law-suit from Apple Corps.?:eek:

William25
Apr 19, 2006, 04:41 PM
I think that the 4% growth is a result of people waiting for the new macbooks.I sold my iBook G3 600mhz for $500 a few months back. Itís too bad I really needed a computer or I would have waited to buy the new iBook. As it is I had to buy a G4 iBook seeing Iím constantly traveling.

hoppo99
Apr 19, 2006, 04:44 PM
But 60+ percent growth in iPod sales is not sustainable. At that growth rate it will not be long before the entire surface of the Earth is covered 10 feet deep in iPods. No kiddding. Expnential growth works like that. Really, if trends continue in 20 years many of us will be crushed by the weight of stacks of iPods. So I guees "trends will not continue."

We can expect to see the market to flatten out generally. What is important now is that Apple maintains they're market share within that market, which I'm sure they'll do. The key is to keep the product line fresh so that people have reason to upgrade as some are doing already doing (I'm on my second ipod). I'm sure Apple has plenty of ideas up its sleeve though...

confirmed
Apr 19, 2006, 04:48 PM
anybody else listening, or trying to listen to the webcast? mine's breaking up like crazy, sometimes stopping to buffer. wonder if it's just me or could it be too many people connected to the webcast?

Nuc
Apr 19, 2006, 04:49 PM
Yea take that you stupid analysts! I hope they come to realize Apple is growing strong!

7on
Apr 19, 2006, 04:49 PM
We can expect to see the market to flatten out generally. What is important now is that Apple maintains they're market share within that market, which I'm sure they'll do. The key is to keep the product line fresh so that people have reason to upgrade as some are doing already doing (I'm on my second ipod). I'm sure Apple has plenty of ideas up its sleeve though...

My iPod is 3 years old and I have no reason to upgrade. ;)

hoppo99
Apr 19, 2006, 04:52 PM
My iPod is 3 years old and I have no reason to upgrade. ;)

But I'm sure they'll come a time when you will want to and Apple have to make sure that it is an iPod you upgrade to rather than a competing music player. Obviously if you've bought many songs on iTMS then it helps to force your hand...

tituspullo
Apr 19, 2006, 04:52 PM
People stopped buying iBooks. That's one reason mac sales were a bit slower. From a quarterly perspective, it makes great sense the way Apple has smoothed out its product updates:

Q4: Holiday rush, iPod sales carry the company
Q1: MacBook Pro, MacMini, and iMac sales help get the transition going
Q2: MacBook and 17" MacBook Pro continue the transition
Q3: Powermac (intel) updates complete the transition + 10.5 Leopard preview
Q4: New iPod in time for holidays (10.5 available for purchase too?).

This always gives investors something to look forward to instead of just updating everything at once and hoping that an effect is immediately visible.

Q1 is the holiday season. the results are for the previous 3 months.

milo
Apr 19, 2006, 04:53 PM
The article states this is the first time Windows is allowed to run on Macs.

Nope. Apple "allowed" VPC for years.

I don't know that I'd call VPC "running". Moseying? Crawling?

Mars
Apr 19, 2006, 04:53 PM
I definitely think that the Mac's market share is going to grow substantially over the next (at least) 2 years.
I myself am not at Mac owner at the moment, but I'm saving money up for the MacBook Pro to buy next month (hopefully).
I see many people I know, really considering buying a Mac next time (because of the Intel transition ofcourse), even though they have never tried one themselves, and these are danish folks, people! :eek: ;)

SPUY767
Apr 19, 2006, 04:58 PM
Am I the only one to consider Steves' statement of "...music business..." being a rather risky "naming" in respect to the ongoing law-suit from Apple Corps.?:eek:

Don't you mean Apple Corpse? That company's been dead for ten years, Lawsuits against apple are probably the only revenue that they get right now. You can only re-release Beatles albums so many times.

DPazdanISU
Apr 19, 2006, 05:13 PM
Apple's stock is up almost 3 dollars after the news. This is interesting because Apple's earnings were lower than what most had forecast. I think many had feared the intel transition would cripple Apples sales for this quarter but now found out that is not true. Things are only going to get better the next few quarters with macbook, new 17inch macbook pro that apple insider says will have some new bells and whistles and HOPEFULLY the VOIP Mac Phone....:cool:

Applespider
Apr 19, 2006, 05:14 PM
Lawsuits against apple are probably the only revenue that they get right now. You can only re-release Beatles albums so many times.

Or release it in new ways. That's why they're partnering Cirque Du Soleil for a major new Vegas show with the Beatles music...

WildCowboy
Apr 19, 2006, 05:20 PM
Apple's stock is up almost 3 dollars after the news. This is interesting because Apple's earnings were lower than what most had forecast.

Consensus was 43 cents per share...AAPL came in at 47 cents.

Linkety (http://biz.yahoo.com/rb/060419/apple_earns.html?.v=6)

milo
Apr 19, 2006, 05:21 PM
Apple's stock is up almost 3 dollars after the news. This is interesting because Apple's earnings were lower than what most had forecast.

Not according to what I've seen online. They delivered 47 cents, estimates were a concensus of 43 cents.

Edge100
Apr 19, 2006, 05:22 PM
Don't you mean Apple Corpse? That company's been dead for ten years, Lawsuits against apple are probably the only revenue that they get right now. You can only re-release Beatles albums so many times.

The Beatles brand is worth billions.

The current Beatles releases (CD) are, without doubt, the poorest quality of any major act. Seriously, they stink. Just listen to 'Eleanor Rigby' from the remastered 'Yellow Submarine' film soundtrack versus the version on 'Revolver'. No comparison.

The point? There is a HUGE market in Beatles reissues. The albums are of substandard audio quality, and will be remastered in stereo and 5.1 eventually. Three of the films 'Help!", "Magical Mystery Tour" and "Let it Be" have never been released on DVD. There are boat loads of live footage, and unreleased material still out there (despite the 1996 Beatles Anthology, the vast majority of recordings remain unreleased).

The earning power of The Beatles remains huge.

mkrishnan
Apr 19, 2006, 05:24 PM
My iPod is 3 years old and I have no reason to upgrade. ;)

I'm in this boat too.... I could sort of see wanting a new one, and I could use more space. But iTunes manages my music well enough that its easy to live with only 15GB on my iPod for me, and there are soooo many other things to spend money on. I can always spend $30 or $40 and just replace the battery in this one. :o So until/unless the HD wears out or it breaks in another fashion.... *crosses fingers*

EDIT: What's up with news articles discussing Apple's profits and sales, and only discussing quarter on quarter? They should know better...but I saw several of these that highlighted the quarter on quarter drop in Mac and iPod sales and never really talked about the SPIT comparison with Q2/05.... :rolleyes:

sam10685
Apr 19, 2006, 05:27 PM
I think that the 4% growth is a result of people waiting for the new macbooks.I sold my iBook G3 600mhz for $500 a few months back. Itís too bad I really needed a computer or I would have waited to buy the new iBook. As it is I had to buy a G4 iBook seeing Iím constantly traveling.

r u gonna sell the G4 when the "macbook" gets here?

mklos
Apr 19, 2006, 06:04 PM
My iPod is 3 years old and I have no reason to upgrade. ;)

I refuse to upgrade my iPod Mini until Apple releases another aluminum iPod! I'm not going to buy something that has to have a metal cage around it just so it doesn't scratch all to hell. Christ, my Silver iPod Mini has been dropped numerous times, thrown around, slides around in my pocket with other items and there is only 1 tiny scratch on the PLASTIC display cover. The aluminum is good as new. Dumbest thing Apple ever did was make the iPod Nano out of plastic!!!

dejo
Apr 19, 2006, 06:08 PM
People stopped buying iBooks. That's one reason mac sales were a bit slower. From a quarterly perspective, it makes great sense the way Apple has smoothed out its product updates:

Q4: Holiday rush, iPod sales carry the company
Q1: MacBook Pro, MacMini, and iMac sales help get the transition going
Q2: MacBook and 17" MacBook Pro continue the transition
Q3: Powermac (intel) updates complete the transition + 10.5 Leopard preview
Q4: New iPod in time for holidays (10.5 available for purchase too?).

This always gives investors something to look forward to instead of just updating everything at once and hoping that an effect is immediately visible.

Q1 is the holiday season. the results are for the previous 3 months.

Yeah, probably didn't realize that Apple's fiscal year starts around October and confused it with the calendar quarters.

aswitcher
Apr 19, 2006, 06:12 PM
Is there any breakdown of which Macs sold what volumes, or which iPods sizes sold what?

WildCowboy
Apr 19, 2006, 06:14 PM
Is there any breakdown of which Macs sold what volumes, or which iPods sizes sold what?
Nope...they stopped doing that a year or two ago...I think they felt too much information was being given out that competitors might be able to take advantage of (like where their relative strengths and weaknesses were).

rdowns
Apr 19, 2006, 06:14 PM
Apple has never released individual iPod sales figures. They used to break down Mac product families but only do desktop and portable now.

http://images.apple.com/pr/pdf/q206data_sum.pdf

Cinematographer
Apr 19, 2006, 06:16 PM
In Q1, they said Apple shipped 667,000 desktop units and 587,000 laptop units, alltogether 1,254,000 Macs.

I guess, these numbers will be published. Did anyone see these numbers for Q2?

EDIT: Thanks for the link, rdowns.

WildCowboy
Apr 19, 2006, 06:19 PM
In Q1, they said, Apple shipped 667,000 desktop units and 587,000 laptop units, alltogether 1,254,000 Macs.

I guess, these numbers will be published. Did anyone see these numbers for Q2?

See the link posted by rdowns right above your post... :D

rdowns
Apr 19, 2006, 06:25 PM
Here are some recent numbers- Macs sold

1Q2002 - 659,000
2Q2002 - 813,000
3Q2002 - 808,000
4Q2002 - 734,000

1Q2003 - 743,000
2Q2003 - 711,000
3Q2003 - 771,000
4Q2003 - 787,000

1Q2004 - 743,000
2Q2004 - 749,000
3Q2004 - 771,000
4Q2004 - 787,000

1Q2005 - 1,046,000
2Q2005 - 1,070,000
3Q2005 - 1,182,000
4Q2005 - 1,236,000

1Q2006- 1,254,000
2Q2006- 1,112,000

WildCowboy
Apr 19, 2006, 06:47 PM
And here are some slightly older numbers to illustrate the levels Apple is getting back to:

1Q2000 - 1,377,000
2Q2000 - 1,043,000
3Q2000 - 1,016,000
4Q2000 - 1,122,000

1Q2001 - 659,000
2Q2001 - 751,000
3Q2001 - 827,000
4Q2001 - 850,000

Cinematographer
Apr 19, 2006, 06:52 PM
So for the last few quarters, we get the following numbers of desktop and laptop units:

Q2 2005 1,070,000 Macs:
608,000 Desktop units & 462,000 Laptop units

Q3 2005 1,182,000 Macs:
687,000 Desktop units & 495,000 Laptop units

Q4 2005 1,236,000 Macs:
602,000 Desktop units & 634,000 Laptop units

Q1 2006 1,254,000 Macs:
667,000 Desktop units & 587,000 Laptop units

Q2 2006 1,112,000 Macs:
614,000 Desktop units & 498,000 Laptop units

But I'm quite confident the laptop numbers will rise again as soon as the Mac Book starts shipping.

Peace
Apr 19, 2006, 06:58 PM
Not being the financial wiz I once was can someone tell me what month Q2 2006 end in ?

WildCowboy
Apr 19, 2006, 07:01 PM
Not being the financial wiz I once was can someone tell me what month Q2 2006 end in ?

March...I guess technically they said it ended April 1st.

Peace
Apr 19, 2006, 07:07 PM
March...I guess technically they said it ended April 1st.


Thanks Cowboy..That's what I thought..

Next quarter's gonna see improvements in the laptop AND desktop sales but I don't think the iPod can sustain a 60% growth for much longer..And that's a big chunk of Apple's revenues..

The educational market seems important to the projections for next quarter..

Come On MacBook,or iBook,or whatever they call it!! :D

WildCowboy
Apr 19, 2006, 07:15 PM
Thanks Cowboy..That's what I thought..

Next quarter's gonna see improvements in the laptop AND desktop sales but I don't think the iPod can sustain a 60% growth for much longer..And that's a big chunk of Apple's revenues..

You're welcome. As I pointed out in this post (http://forums.macrumors.com/showpost.php?p=2331176), Apple is predicting a slight dip in iPod sales for this quarter. This will bring the iPod annual growth under 40%.

dongmin
Apr 19, 2006, 07:30 PM
Next quarter's gonna see improvements in the laptop AND desktop sales but I don't think the iPod can sustain a 60% growth for much longer..And that's a big chunk of Apple's revenues..We'll see about that. I'm sure Apple has some cool toys from its ipod division in the works. Whether these will be successful is anyone's guess, but do expect Apple to diversify its offerings (real video ipod, ipod phone, etc.) and offer more products to keep growing the business.

longofest
Apr 19, 2006, 07:36 PM
...Also announced to day, Apple's market share has slipped to 3.5% from 3.6% last year. Oh well...

Play Ultimate
Apr 19, 2006, 07:37 PM
But I'm sure they'll come a time when you will want to and Apple have to make sure that it is an iPod you upgrade to rather than a competing music player. Obviously if you've bought many songs on iTMS then it helps to force your hand...

I would think that the time and effort to upload songs from one's CD collection into iTunes would be more of a factor than the ## of songs purchased. Can you imagine uploading 20+ GB of music onto another player's software solution? :eek:

Xander562
Apr 19, 2006, 07:55 PM
daaaaaammmnnnnn thas a lot

Rocketman
Apr 19, 2006, 08:13 PM
And here are some slightly older numbers to illustrate the levels Apple is getting back to:

1Q2000 - 1,377,000
2Q2000 - 1,043,000
3Q2000 - 1,016,000
4Q2000 - 1,122,000

1Q2001 - 659,000
2Q2001 - 751,000
3Q2001 - 827,000
4Q2001 - 850,000

Someone (you) should do this in a timeline with "major product releases" and determine "Apple value added" products.

Since they have a 50 acre campus and a telco facility in the works, the least you could do is tell Apple what works :)

Rocketman

freeny
Apr 19, 2006, 08:14 PM
daaaaaammmnnnnn thas a lot
A lot of what?

Super Dave
Apr 19, 2006, 08:21 PM
Apple has never released individual iPod sales figures. They used to break down Mac product families but only do desktop and portable now.

http://images.apple.com/pr/pdf/q206data_sum.pdf


Almost 500M/quarter in non iPod music related sales. Wow! That's a lot of songs and socks.

David:cool:

Grimace
Apr 19, 2006, 08:23 PM
Yeah, probably didn't realize that Apple's fiscal year starts around October and confused it with the calendar quarters.

Yep, September-December is Q1 for Apple, but I thought most people would read it in terms of the calendar year so I wrote it like that.

bmoorhouse
Apr 19, 2006, 08:46 PM
The article states this is the first time Windows is allowed to run on Macs.

Nope. Apple "allowed" VPC for years.

VPC is not the same thing. With VPC, everything was emulated using virtual hardware. With Boot Camp, Windows is actually running on and actually using the installed physical hardware. This IS the first time Windows has run on Mac hardware.

nsjoker
Apr 19, 2006, 09:05 PM
I refuse to upgrade my iPod Mini until Apple releases another aluminum iPod! I'm not going to buy something that has to have a metal cage around it just so it doesn't scratch all to hell. Christ, my Silver iPod Mini has been dropped numerous times, thrown around, slides around in my pocket with other items and there is only 1 tiny scratch on the PLASTIC display cover. The aluminum is good as new. Dumbest thing Apple ever did was make the iPod Nano out of plastic!!!

I completely agree with this. The anodized aluminum on the iPod minis was amazing. I'm guessing Apple used plastic in the nanos to keep the iPod economy strong. In a way, they're betting that your iPod will scratch and you'll want to buy a nano tube or some third party case. The aluminum almost certainly costs more to produce and weighs a bit more than the plastic too. Kind of lame but Apple is a business afterall. :cool:

Here's hoping for an aluminum iPod in the next year :o

weldon
Apr 19, 2006, 10:36 PM
VPC is not the same thing. With VPC, everything was emulated using virtual hardware. With Boot Camp, Windows is actually running on and actually using the installed physical hardware. This IS the first time Windows has run on Mac hardware.
Could the Quadra 610 DOS Compatible (http://docs.info.apple.com/article.html?artnum=112244) not run Windows? Of course, we had the Orange Micro boards in our shop back then. That wasn't really Mac hardware.

Maybe they meant the first time "without a co-processor board."

bmoorhouse
Apr 20, 2006, 12:43 AM
Could the Quadra 610 DOS Compatible (http://docs.info.apple.com/article.html?artnum=112244) not run Windows? Of course, we had the Orange Micro boards in our shop back then. That wasn't really Mac hardware.

Maybe they meant the first time "without a co-processor board."

Actually, you are right. I forgot about the Quadras with the co-processor boards. It's been a long time, but couldn't you actually switch between systems without shutting down on those?

milo
Apr 20, 2006, 09:05 AM
I would think that the time and effort to upload songs from one's CD collection into iTunes would be more of a factor than the ## of songs purchased. Can you imagine uploading 20+ GB of music onto another player's software solution? :eek:

I don't see what the problem would be as long as you ripped as mp3.

weldon
Apr 20, 2006, 09:58 PM
Actually, you are right. I forgot about the Quadras with the co-processor boards. It's been a long time, but couldn't you actually switch between systems without shutting down on those?
I think so. The OrangePC board was like having another computer in a Nubus slot (remember those?). The Mac had to be on to deliver power to the card, but otherwise was almost completely separate. The board had its own RAM I think. I'm not quite sure how the DOS Compatible board from Apple worked though.

Bosunsfate
Apr 21, 2006, 09:17 PM
Spend them on Apple Stock. It is certainly a good buy for the next few years.:)