On Jan. 22, ubiquitous gadget guru Apple (Nasdaq: AAPL) released first-quarter 2008 earnings for the period ended Dec. 29, 2007.

  • The iPod/iTunes gravy train rolls on, right alongside iPhones, iMacs, iToasters, and iSinks. OK, not the last two, but you get the picture.
  • Apple doesn't much like to repurchase stock; it hasn't paid a dividend since 1996, when the iPod was but a glimmer in Steve Jobs' spectacled eye; and it spent just $455 million on acquisitions in the last 20 years. What are you hoarding all that cash for, Steve?
  • Then again, this company is less recession-proof than some others I can think of. Forty-four percent of Apple's revenue comes from the Americas alone. A debt-free, $18 billion bankroll should get Cupertino through plenty of bad times.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$9,608

$7,115

35.0%

Net Profit

$1,581

$1,004

57.5%

EPS

$1.76

$1.14

54.4%

Diluted Shares

900.1

883.3

1.9%

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

34.7%

31.2%

3.5

Operating Margin

22.1%

18.6%

3.5

Net Margin

16.5%

14.1%

2.4

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$18,448

$11,869

55.4%

Accounts Rec.

$1,939

$1,621

19.6%

Inventory

$459

$303

51.5%

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable

$5,366

$3,885

38.1%

Long-Term Debt

$0

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash From Ops.

$2,787

$1,813

53.7%

Capital Expenditures

$224

$142

57.7%

Free Cash Flow

$2,563

$1,671

53.4%

Owner Earnings

$1,463

$936

56.3%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

Apple

$120,680

34.9

***

Research In Motion (Nasdaq: RIMM)

$47,560

45.3

**

Dell (Nasdaq: DELL)

$43,920

14.8

**

Adobe Systems (Nasdaq: ADBE)

$19,120

27.5

****

Netflix (Nasdaq: NFLX)

$1,490

24.0

**

Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

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