Apple 2Q 2008 Results, 3Q Preview

[MacRumors]

Tomorrow Apple will announce its financial results for the second fiscal quarter of 2008, spanning January through March, and give its guidance on what it expects in the third fiscal quarter. What should we expect? Let's recap what has happened this past quarter vs. last year.

2Q 2007 Highlights

• $5.26 billion revenue, $770 Million Profit ($.87 per diluted share)
• AppleTV formally announced, shipped
• iPhone Announced (no income from iPhone until late 3Q 2007)
• Multi-Colored iPod Shuffle Released
• Quiet update to Xserve RAID (capacity update)

2Q 2008 Highlights

• Apple's Guidance: $6.8 billion revenue, $.94 per diluted share profit
• Street Expectations: $6.9 billion revenue, $1.07 profit per share
• AppleTV Take 2 + Movie Rentals
• MacBook Air Introduction
• Aperture 2 Released
• Xserve RAID Discontinued
• XSan 2
• iPod Shuffle capacity bumps
• iTunes climbs sales ranks (#2, #1 just after close of quarter)
• Penryn based MacBooks
• Penryn based MacBook Pros with Multitouch trackpad

Readers should be aware that many complex factors contribute to a company's bottom line beyond what the public sees, so this recap should be used for informational purposes only. On that note, here's a recap of the current news and rumors for next quarter.

Current 3Q 2008 News/Rumors

• Final Cut Server shipped
• iPhone/iPod Touch Software 2.0 (June)
• Rumor: iMac, Mac Mini Penryn Updates
• Rumor: 3G iPhone in June
• Rumor: MacBook, MacBook Pro Design Changes with Montevina (June)

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[ramuman]

Expectations are high, let's see how they forecast and if any tidbits about iPhone plans come out.

[longofest]

More info:

3Q 2007 Highlights

• $5.41 billion revenue, $818 million profit ($.92 per diluted share)
• iTunes Plus announced
• 8-Core Mac Pro option
• Cinema Display Price Cuts
• Leopard Delayed Until October
• Final Cut Studio 2 released
• WWDC previews Leopard, Safari for Windows announced
• SEC Options Backdating investigation
• Apple Joins S&P 100
• iPhone goes on sale

[izibo]

I'm just hoping that the market responds positively after the sell off today. Had an opportunity to pick up a few more shares and am hopeful that Apple doesn't make me look like a moron as a result.

[Zwhaler]

I think shareholders have nothing to worry about. If even half of the rumors about the 3G iPhone are true, their stock should shoot up as a result.

[peterlobl]

Today's drop owed to market doldrums and analyst downgrade (to neutral from buy)...
this on top several upgrades from past days...

The experts are torn- I think it best to pull a Harry Truman and go to sleep at 4PM! Pump in the CNBC love at the gym tomorrow at 6am, and take out residual stress/euphoria on the weights

[Icaras]

How come the release of Time Capsule is not on that 2008 highlights list?

[Grimace]

Originally Posted by Icaras

How come the release of Time Capsule is not on that 2008 highlights list?

Good point.

[Mykbibby]

Are the Macbook/ MBP updates expected for Q3, or rumored?

Also, what is the deal with Apple Insider's tablet mac they're so sure about? When will we see that?

[Grimace]

Originally Posted by Mykbibby

Are the Macbook/ MBP updates expected for Q3, or rumored?

Also, what is the deal with Apple Insider's tablet mac they're so sure about? When will we see that?

Apple doesn't say when it will release updates to machines; the MacRumors Buyer's guide doesn't predict anything in Q3.

You will definitely, without a doubt, see the tablet mac on July 4th. Seriously, no one knows - it's been speculated for years so I wouldn't count on anything. The overall market doesn't really *need* a tablet mac, although a lot of us fanboys would get one anyway.

[reidme]

I thought the new iMacs were due "in a few weeks" for the last couple of months. Now its Q3?

[inkswamp]

Originally Posted by reidme

I thought the new iMacs were due "in a few weeks" for the last couple of months. Now its Q3?

They'll be due "in a few weeks" when we're a few weeks off the one-year date of the last update.

There was a time when Apple would update the consumer-level products around 4-5 months at the most (occasionally surprising everyone with something new at 3 months.) You could always count on spec bumps or price drops or the line-up shuffle where they introduced a new high-end model and pushed the others down into the next lower price point. For whatever reason, Apple has been pushing close to a full year on the Mini and the iMacs and I think that's pretty lame, especially when you consider how fast computer technology moves forward. Last year's stuff is ancient history.

I don't want to beat a dead horse or hijack the thread, but if you're interested, I've brought this topic up in another thread on the forums.

[stagi]

Im hoping they beat expectations and give a good upbeat guideance for Q3 shares after the last conf call tanked so i hope this time around there is better news, although with all of the bad news of the economy I would assume consumers will start to spend a little less.

[Shasterball]

If they miss or even just meet expectations, the stock will definitely drop. They've already been downgraded... Not the time to invest!

[AuntJemima]

Originally Posted by Icaras

How come the release of Time Capsule is not on that 2008 highlights list?

That relates to Q1 of 2008, although they did not ship until Q2 they were annouced at MWorld.

[skwoytek]

Originally Posted by AuntJemima

That relates to Q1 of 2008, although they did not ship until Q2 they were annouced at MWorld.

Apple's fiscal year starts in October (previous year) and ends in September (current year).

Oct-Dec '07 = Q108
Jan-Mar '08 = Q208
Apr-Jun '08 = Q308
Jul-Sep '08 = Q408

Time Capsule was announced and shipped in Q208.

[Rocketman]

Several fairly accurate commentators on CNBC (financial channel) have predicted AAPL to $250 per share or more in 2009. Other more assertive people have suggested over $350. This is based on a multiple of projected sales and sales growth. AAPL typically peaks in December or so.

Rocketman

[twoodcc]

looking forward to what's said tomorrow. i predict some pretty good numbers

[cnote678]

Well, I think Apple is going to come out of this just fine. Okay, so value is down for Apple, but the 3G iPhone(which is inevitable) will set everything back to 'Buy' again. Then the eventual introduction of Penryn and/or Montevina, if they skip Penryn, into iMacs/Minis(and Montevina eventually into notebooks) will keep Apple doing well. Last but not least, if any redesign happens to the notebooks, the 'Buy' recommendation will be squared as marketshare continues to climb.

That's based on a hell of a lot of speculation, but I'm optimistic.

[bigandtasty]

Man, I hope your right Cnote, I have a lot riding on Apple right now

[ghstmars]

i believe it will be announce that Apple bought award winning fabless chip power efficient designer P.A Semi... dual core 2 mhz 64 bit 5 to 12 watt consuming processor.... bye bye Atom

http://www.forbes.com/technology/200...0422apple.html

[Earendil]

Originally Posted by ghstmars

i believe it will be announce that Apple bought award winning fabless chip power efficient designer P.A Semi... dual core 2 mhz 64 bit 5 to 12 watt consuming processor.... bye bye Atom

http://www.forbes.com/technology/200...0422apple.html

dual core 2 mhz? hot damn, that'll give the Apple II a run for its money!

It'll be interesting to see what all this effects...

[Bonte]

Originally Posted by Grimace

You will definitely, without a doubt, see the tablet mac on July 4th. Seriously, no one knows - it's been speculated for years so I wouldn't count on anything. The overall market doesn't really *need* a tablet mac, although a lot of us fanboys would get one anyway.

I think a tablet iPhone is more probable than a tablet Mac, i need.

[BongoBanger]

My guess:

Mac sales up - probably about 2.1-2.3 million. Need to know how many of them were Airs though and if this impacted MB and MBP sales.

iPod sales down - at the moment it looks like market saturation may be setting in. In addition, the PMP is starting to die off a bit with the emergence of convergence devices.

iPhone sales in line with expectations - really difficult to call. AT&T's quarterly results showed an addition of 1.3 million new subscribers which was in line with or just below most analysts estimates. However, we know a considerable number of iPhones have been jailbroken so sales in the US (for domestic use on another carrier/plan or export) may be higher. However we also know that European sales appear to have been below expectations.

So, I expect Apple to beat estimates on the back of Mac sales but the question is "will it be enough"?

[IJ Reilly]

Originally Posted by BongoBanger

So, I expect Apple to beat estimates on the back of Mac sales but the question is "will it be enough"?

Enough for what, to satisfy the nay-sayers?

My prediction on the all-important EPS: $1.25.

I predict also that guidance will be conservative, as usual -- which also, as usual, will shock and dismay investors.