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Apple 1st Quarter Results and Conference Call

MacRumors

macrumors bot
Original poster
Apr 12, 2001
50,441
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Apple reported first quarter results today:

For the quarter, the Company posted a net loss of $8 million, or $.02 per share. These results compare to a net profit of $38 million, or $.11 per diluted share, in the year-ago quarter. Revenues for the quarter were $1.47 billion, up 7 percent from the year-ago quarter, and gross margins were 27.6 percent, down from 30.7 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter?s revenues.
The quarter?s results included a $17 million after-tax restructuring charge and a $2 million after-tax accounting transition adjustment. Excluding these non-recurring items, the Company?s net profit for the quarter would have been $11 million, or $.03 per share.

Apple's Financial Results Conference call is currently ongoing.
 

Talon1138

macrumors newbie
Feb 5, 2002
24
0
powermac talk

People are asking about powermacs.

I hope Apple fully realizes that while they think that its the "Year of the Laptop," consumers want a new Powermac.
 
Comment

artistry

macrumors regular
Jan 2, 2003
107
0
Brighton, UK
They should stop giving stuff away free

Sales flat, but a loss. A poor business model IMHO.

Apple needs to earn a profit and this should come from what it does best: innovation. It shouldn't be afraid to charge for iApps despite what skinflints might say. This would have been a smaller loss if Apple had charged even a nominal fee for iApps - a lot of crappy shareware costs a lot more for a lot less!

The charge for .Mac makes more and more sense - do the maths...
 
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MOM

macrumors member
May 14, 2002
81
0
San Francisco
Looking at the sales of computers , software etc, it looks like the saftware sales and the iPod saved them from a much worse quarter.
 
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macktheknife

macrumors 6502a
Jan 24, 2002
639
0
Posting a loss during Christmas (fiscal 1Q for Apple) is certainly bad news, although it isn't surprising considering how slow sales have been for the pro line of Power Macs. What's worrisome, though, is that Apple continues to lose money even after earning interest on its $4 billion cash hoard. A year ago, a big chunk of that $0.11 profit per share was due in part to the interest earned on the cash. That is, the money they lost in sales was compensated in part by the interest on their cash.

So if Apple is losing money even after the interest they earned, this is very bad news for the company.
 
Comment

lmalave

macrumors 68000
Nov 8, 2002
1,614
0
Chinatown NYC
Re: They should stop giving stuff away free

Originally posted by artistry
Sales flat, but a loss. A poor business model IMHO.

Apple needs to earn a profit and this should come from what it does best: innovation. It shouldn't be afraid to charge for iApps despite what skinflints might say. This would have been a smaller loss if Apple had charged even a nominal fee for iApps - a lot of crappy shareware costs a lot more for a lot less!

The charge for .Mac makes more and more sense - do the maths...

Well 200,000 x $100 = $20 million in revenues so far that .Mac has contributed to Apple's coffers in *total*. Compare that to the $6 billion in revenues that Apple makes a year, mostly from harware sales. The math makes it VERY clear, in my opinion, that Apple has a lot more to gain from spurring hardware sales. The iApps are a huge attraction, especially for switchers, and the fact that they're free makes a huge impact.

Look, Apple's sales stayed flat despite the ongoing tech and economic downturn, and the ongoing PPC chip drought. The question I would ask is: how much worse could it have been? I think SJ and Apple have finessed their predicament almost to perfection...
 
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lmalave

macrumors 68000
Nov 8, 2002
1,614
0
Chinatown NYC
Originally posted by macktheknife
Posting a loss during Christmas (fiscal 1Q for Apple) is certainly bad news, although it isn't surprising considering how slow sales have been for the pro line of Power Macs. What's worrisome, though, is that Apple continues to lose money even after earning interest on its $4 billion cash hoard. A year ago, a big chunk of that $0.11 profit per share was due in part to the interest earned on the cash. That is, the money they lost in sales was compensated in part by the interest on their cash.

So if Apple is losing money even after the interest they earned, this is very bad news for the company.

Well, interest earnings are down for most people across the board for the past couple years, in case you haven't noticed :rolleyes:

It's all part of the business cycle - I wouldn't worry. Once the economy picks up both Apple's sales and interest income will surge, and Apple will me earning close to $1 Billion a year like they were in the late 90's.
 
Comment

Rocketman

macrumors 603
Re: Apple 1st Quarter Results and Conference Call

Originally posted by Macrumors
Apple reported first quarter results today:

Apple's Financial Results Conference call is currently ongoing.

The 1.47B quarter sales while good is a tiny fraction of other corporations and small compared to several PC companies. So Apple is a small fish in a big pond.

The margin reduction from 30% to 27% is based on several factors including post 9-11 slump, Motorola failing to deliver premium value processors that command new sales at high margins, and a focus on free products like iApps.

I would not place too much emphasis on the "net profit" as it is a tax motivated figure and Apple is not a major dividend paying company. With the elimination of dividend taxes Apple might be one of those few companies that ADD dividends. They have high margins and high cash, which is the conditions necessary for divident paying.

Also the low net profit is largely impacted by strong retail outlet growth. As soon as location growth slows they will be declaring more net profit simply because they have fewer deductions to shelter income with.

I would be very interested to see margins broken down by product line. The year of the laptop sounds like the year of margin growth to me.

Apple could use more software revenues and they are obviously aware of this based on their efforts to charge alot for .mac and and nearly charging for some iApps. But if they charge for apps like their presentation, all-in one programs, whatever office alternative they eventually release and get more adoption for audio and video apps, they will be doing good.

What they really need is the Marklar program to not be yet another prep without a product. Some PC owners will never buy a Mac till they are de-enculturated and that can be done with a single cycle with Marklar/Star Trek/whatever.

Apple could use more zealots but to gain them they will have to establish a clear benefit path. The least resistent path for that id to start something running on PC's and show people WHY they NEED a Mac to really do what they now want.

People learn experientially better than intellectually.

Rocketman
 
Comment

Nermal

Moderator
Staff member
Dec 7, 2002
18,953
1,433
New Zealand
International sales accounted for 43 percent of the quarter's revenues.

OK, Apple's making international sales. However, as most people outside the US know, most of Apple's products are a lot more expensive internationally than they are in the US. I think that if Apple put their international prices in line with their US prices, then they would make many more sales, and therefore more revenue, more market share, etc. Anyone else agree?
 
Comment

Redhorse

macrumors newbie
Jan 15, 2003
3
0
Germany
Originally posted by Nermal
.... Anyone else agree?


A big YES!

We need a Power Mac G4 for home users and switchers. The iMac TFT ist great, but a desktop or tower about 1000 € (incl. tax) will push up the market share!
 
Comment

macktheknife

macrumors 6502a
Jan 24, 2002
639
0
Re: Re: Apple 1st Quarter Results and Conference Call

Originally posted by Rocketman
I would be very interested to see margins broken down by product line. The year of the laptop sounds like the year of margin growth to me.

Apple's latest 10-K report shows the following breakout of sales by product lines. Sales are in millions of US dollars and the percentages represent proportion of sales:

Power Macintosh net sales - $1,380 (24.0%)
PowerBook net sales - $831 (14.5%)
iMac net sales - $1,448 (25.2%)
iBook net sales - $875 (15.2%)
Software, Service, and Other net sales - $1,208 (21.0%)
Total net sales - $5,742

You wouldn't have guessed it (and I certainly didn't), but Apple makes more than a fifth of its revenues through the sale of software.
 
Comment

Rocketman

macrumors 603
Originally posted by Nermal
International sales accounted for 43 percent of the quarter's revenues.

OK, Apple's making international sales. However, as most people outside the US know, most of Apple's products are a lot more expensive internationally than they are in the US. I think that if Apple put their international prices in line with their US prices, then they would make many more sales, and therefore more revenue, more market share, etc. Anyone else agree?

Much of that is taxes associated with differences in how different countries tax. VAT is common in europe and income tax is commin in US. As such much of international sales prices effectively include double taxation. This can only be solved by treaty.

I sell tech products and sadly see the exact same thing.

Rocketman
 
Comment

vniow

macrumors G4
Jul 18, 2002
10,266
0
I accidentally my whole location.
Originally posted by macktheknife
You wouldn't have guessed it (and I certainly didn't), but Apple makes more than a fifth of its revenues through the sale of software.

 
Comment

lmalave

macrumors 68000
Nov 8, 2002
1,614
0
Chinatown NYC
Re: Re: Re: Apple 1st Quarter Results and Conference Call

Originally posted by macktheknife

You wouldn't have guessed it (and I certainly didn't), but Apple makes more than a fifth of its revenues through the sale of software.

Freakin' Applecare :mad:

Tack on $300 to a product that's on average $1500 or so, and yeah, that'll add to your revenues!
 
Comment

Chad4Mac

macrumors 6502
Apr 20, 2002
299
0
Los Angeles
During the conference call a question arose about the PowerMac and the slumping sales. The question was something like, "what is Apple going to do to boost PowerMac sales?"

The response by Fred was that Apple is confident that future sales will increase due to new product innovations on the PowerMac later is year.

When Apple releases the new PowerMac, and if they can continue to keep sales up on the current computer line/software/iPod, the overall balance sheet or accounting picture could be quite good. This too in retrospect with the better CompUsa and Apple sales revenue.

We are in the worst of the worst (if not in October) and Apple (beside wierd payments) is flat, with no real downturn. Just keep to budget on R & D, release useful, innovation products and there won't be a problem.

I think that the later release of the PowerMac is a good thing, being that later this year we should see some kind of economic turn-around, which should draw bigger demand to a pro-line PowerMac.

IMO, later this year, Apple will be release products that turn heads as usual, increase market share (based on Apple Stores and Apple Online sales to Windows customers), and still produce a rock solid balance sheet.

I like the buy symbol...

Chad4Mac
 
Comment

Choppaface

macrumors 65816
Jan 22, 2002
1,187
0
SFBA
Re: Re: Re: Re: Apple 1st Quarter Results and Conference Call

Originally posted by lmalave
Tack on $300 to a product that's on average $1500 or so, and yeah, that'll add to your revenues!

ya, especially when they don't even have to pay for all those powerbooks with the bad paint :rolleyes: :rolleyes:

i wonder how many people actually cost apple $300 or more in tech support
 
Comment

MacKid

macrumors 6502
Jan 1, 2003
386
0
Re: Re: Re: Re: Apple 1st Quarter Results and Conference Call

Originally posted by lmalave


Freakin' Applecare :mad:

Tack on $300 to a product that's on average $1500 or so, and yeah, that'll add to your revenues!

Ever had a problem with your computer, and then used AppleCare to have the hardware/software fixed or replaced? For something that would cost $70-$130, it's totally free! In my opinion, that it's a pretty good thing! :D
 
Comment

achmafooma

macrumors regular
Oct 14, 2002
150
0
Northern Virginia
overlooked point...

An overlooked point mentioned on MacMinute.com:

"The quarter's results included a $17 million after-tax restructuring charge and a $2 million after-tax accounting transition adjustment. Excluding these non-recurring items, Apple's net profit for the quarter would have been $11 million, or $.03 per share."

Sounds like Apple isn't doing half bad to me, and even if they can maintain the status quo that would end up being a profit in a quarter without those abnormal charges.

And maybe it's just working on a hunch, but I can't believe that market share has remained stagnant - I see a LOT of people buying their first Mac in the Apple store, and three of my friends PLUS myself have all switched in the last two years. I can't imagine this is isolated to people I know.

Apple's doing okay :) Have faith!
 
Comment

MacKid

macrumors 6502
Jan 1, 2003
386
0
Re: overlooked point...

Originally posted by achmafooma
An overlooked point mentioned on MacMinute.com:

"The quarter's results included a $17 million after-tax restructuring charge and a $2 million after-tax accounting transition adjustment. Excluding these non-recurring items, Apple's net profit for the quarter would have been $11 million, or $.03 per share."

Sounds like Apple isn't doing half bad to me, and even if they can maintain the status quo that would end up being a profit in a quarter without those abnormal charges.

And maybe it's just working on a hunch, but I can't believe that market share has remained stagnant - I see a LOT of people buying their first Mac in the Apple store, and three of my friends PLUS myself have all switched in the last two years. I can't imagine this is isolated to people I know.

Apple's doing okay :) Have faith!

I agree!:D My local Apple Store (Tysons' Corner) has been increasing in population ever since the Thanksgiving sale. I think Apple is doing pretty good in terms of catching some eyes.
 
Comment

Chad4Mac

macrumors 6502
Apr 20, 2002
299
0
Los Angeles
Re: overlooked point...

Originally posted by achmafooma
An overlooked point mentioned on MacMinute.com:

"The quarter's results included a $17 million after-tax restructuring charge and a $2 million after-tax accounting transition adjustment. Excluding these non-recurring items, Apple's net profit for the quarter would have been $11 million, or $.03 per share."

Keywords: "...would have been $11 million, or $.03 per share."

Keyword: "Accounting"

Chad4Mac
 
Comment

unfaded

macrumors 6502
Dec 12, 2002
276
0
Seattle, WA
Re: Re: Re: Apple 1st Quarter Results and Conference Call

You wouldn't have guessed it (and I certainly didn't), but Apple makes more than a fifth of its revenues through the sale of software.

Uh, that would include the iPod, under "other" - as it doesn't fit into the other four categories, now does it.

It actually may include the eMac as well, as it does not have its own category. Software is probably not a big portion of that.
 
Comment

bryng

macrumors member
Jan 5, 2003
78
0
I'm guessing those flat sales figures will mean that no matter how pissed we are about the lack of speed bumps, Apple are even moreso.

No great surprise from those software figures that new charges are being either introduced or mooted. Apple's core business is software, and that's not reflected in those numbers...
 
Comment

Hawthorne

macrumors regular
Jul 1, 2002
198
0
In front of my Mac
Re: Re: overlooked point...

Originally posted by Chad4Mac


Keywords: "...would have been $11 million, or $.03 per share."

Keyword: "Accounting"

Chad4Mac

Shuffling numbers in accounting is what makes this a great country!

Sincerely,

The Chief Executives of Enron
:D
 
Comment

Tue12

macrumors member
May 14, 2002
57
0
Aaaaaaaaa. Aaaaaaaaaaaaaa. <clearing throat>

<puts on flame retardant suit>

"Apple is beleaguered."

<runs for dear life>

:p
 
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