Apple Slices, Amazon Reprises, Starbucks Surprises

Well, iPod, you've had a good run. But now it's time to hand the baton to the Mac for the next leg of the relay race.

Brisk sales of Mac desktops and MacBook laptops helped fuel yet another market-thumping quarter for Apple (Nasdaq: AAPL  ) . The company's revenue soared 43% higher to $7.5 billion, with earnings huffing and puffing 36% higher to $1.16 a share. The showing smoked Wall Street's expectations of $1.07 a share in profits on less than $7 billion in revenue.

The iPod is hanging in there. The iPhone is a welcome addition. However, this quarter's healthy advances were all about the Mac, baby.

Q2 2008

Units

% Change

Mac

2.3 million

51%

iPod

10.6 million

1%

iPhone

1.7 million

n/a

Don't let the sheer unit volumes confuse you. Moving 2.3 million computers is far more lucrative than moving a ton of low-priced iPods. Computer revenue of $3.5 billion during the quarter almost doubled the $1.8 billion in iPod sales.

Are iPod sales peaking? That's not a fair question to ask. Remember that those 1.7 million iPhones also double as high-end iPod players.

A few years ago, the iPod's breakthrough was Apple's ticket out of stagnancy. Once the iPod became cool with mainstream audiences, the Macintosh platform followed. It's called the halo effect, and it has helped guide Apple to 21 consecutive quarters of beating the market's profit expectations. The move has also plumped Apple's coffers, now bursting with $19.4 billion in cash.

Halo accomplished.

News to go
There's always a rumble in the jungle whenever Amazon.com (Nasdaq: AMZN  ) reports. Despite its stocky frame -- and we're talking about a company that may ring up as much as $20 billion in sales this year -- it has the speed of a sprinter. Net sales climbed 37% higher during the quarter, while earnings came through with a 30% spurt. Yes, the company benefited from a weak dollar relative to its overseas business (which now accounts for 49% of the revenue-mix pie), but even its North American sales grew by a robust 31%. Quick feet. Good hands. Big body. Maybe someone will draft Amazon as a tight end during this weekend's NFL draft.

With more meat in the middle, Chipotle Mexican Grill's (NYSE: CMG  ) signature burritos are probably better suited for the offensive line. Chipotle put up yet another strong quarter last night by layering heady expansion on top of cool industry-envying comps. Find me another eatery posting double-digit gains at the unit level, the way Chipotle just did with its 10.2% comps gain. In a climate of rising food costs and wages, it's just as hard to find a concept sporting wider margins, but that's just what Chipotle did in growing revenue and earnings by 29% and 39% respectively. That's just the way that fast-growing burrito shops roll.  

If we were to give Starbucks (Nasdaq: SBUX  ) a spot on the roster, the fallen java darling would probably be a greasy-handed receiver. It's been dropping the ball a lot lately, and last night was no different. The premium coffeehouse chain isn't supposed to post its quarterly results until next week, but it wants to pour the bad news while it's still hot. Starbucks is now talking down its guidance, expecting profits to clock in lower for both the quarter and all of fiscal 2008. The company is blaming the housing downturn for the malaise, but maybe it should go next door to Chipotle to see where the people are. Obviously, the turnaround at Starbucks is going to take some time. Howard Schultz has been back at the helm for only a few months. However, shareholders daydreaming of a quick return to grace will have to wait. Sip a latte in the meantime. Make it a venti so it lasts longer.

Every team needs a quarterback, so let's bring in Select Comfort (Nasdaq: SCSS  ) . No, it's not as if the air-mattress maker has excelled in leading investors down the field these days. I'm just tapping it as quarterback because if the stock heads any lower, it won't be long before shareholders start asking for their quarter back. It was another dreadful quarterly report out of the Sleep Number company. Revenue fell by 22%. Last year's profit was reversed into a steep loss. Hail Mary? I'm going to need it, since I actually own this stock.

Have a great day out there.


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