Apples, burgers, and tuna sandwiches colored in the edible week that was.
Mortal crimes in Eden after nibbling on that Apple
It was the kind of earnings report that Apple Computer (NASDAQ:AAPL) shareholders were dreaming about. With 5.3 million iPods finding new ears and more than a million of its flagship computer products sold, Apple shattered even the most optimistic of March quarter profit expectations.
Those who figured that Apple's margins would take a hit as the company shifted to selling lower-priced computers and iPod Shuffles were glaringly wrong: The company boasted 70% in revenue growth and a 530% spike in profits. Although the company's current-quarter guidance will show a sequential dip in profitability, its new bottom-line target is actually well ahead of the market's targets, too.
Perfect? Well, sometimes perfect isn't good enough. The stock fell on the news. Then again, the shares have nearly tripled over the past year. Perhaps stock euphoria got a bit ahead of the company this time, but Apple's looking good, and continued weakness may present that buying opportunity that you've been longing for since you started kicking yourself for missing the stock's initial run.
You can tune a piano, but you can't tuna sandwich
After Time Warner's (NYSE:TWX) America Online subsidiary watched its subscriber base shrink from a peak of 26.7 million domestic members a little over two years ago to just 22.2 million today, it's now trying to plug the exits by making its service more valuable to its existing user base while expanding its AOL.com Web portal to reach everyone else.
You have to like the company's latest move -- it's teaming up with XM Satellite Radio (NASDAQ:XMSR) to launch a digital audio network. In providing premium streamed content for the rest of the wired world -- and making that same service free to its own subscribers -- the company hopes to lure back subscribers to AOL while it creates a new revenue stream out of AOL.com.
The public hasn't exactly warmed up to paying for streamed content, though that hasn't stopped companies like RealNetworks (NASDAQ:RNWK) from trying. Yet even if the product doesn't win too many premium signups at its portal, the new network will help differentiate the AOL service from the many dial-up and broadband ISPs that are offering connections at cheaper prices. It's a catchy tune, indeed.
It was a good McMarch. Now, would you like some fries with that?
Not all fast-food chains are the same. Wendy's (NYSE:WEN) posted sluggish comps for March a week earlier, leading cynics to point the finger at a particularly gruesome incident as a possible cause for the burger company's shortcomings. Meanwhile, McDonald's (NYSE:MCD) returned with a thumbs-up for March. Same-store sales grew an impressive 6.8% at Mickey Ds.
The strong showing now finds the company supersizing its quarterly guidance. McDonald's is now expecting to earn $0.56 a share for the quarter. Grimace? No way.
And in my desperate attempt to wrap this up in one cohesive package -- letting the first story lock arms with the last one and singing a little virtual Kumbaya -- anyone know the name of the new McDonald's fruit snack that it rolled out a few months ago? Yes, that's right -- Apple Dippers.
The headlines behind this week's stories:
- Should Apple's Shareholders Worry?
- God Bless America Online
- AOL and XM Make Beautiful Music
- McDonald's Merry March
Until next week, I remain,
Longtime Fool contributor Rick Munarriz really does like those Apple Dippers -- but not the Apple dipping. He does not own shares in any of the companies in this story. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
