Shareholders at computer and music appliance maker AppleComputer
Then there was yesterday's stock market action, where the expectation of a spectacular earnings report today could not stop the stock from somehow falling 3.8% in an admittedly weak stock market.
Well, earnings were outstanding and beat analyst expectations. Quarterly revenue was up a healthy 70%, and net income increased more than 500%. The stock, however, was down 7% in early-morning trading.
Hard to know for sure, actually. One culprit may be that while the number of computers sold was up 2% compared with last quarter (a 43% increase in CPU unit sales compared with the year-ago quarter), revenue per unit declined 16%. And while the company said iPod unit sales increased 588% compared with the year-ago quarter, more recent news took center stage: The number of iPods sold increased 16% compared with last quarter, but revenue per unit declined 16%. But this is to be expected, I suppose, given that Apple's newer, cheaper products -- the iPod Shuffle and iPod Mini -- have been coming into their own and will naturally bump down revenue-per-unit figures.
Apple's CFO, however, made comments in a later conference call suggesting overall revenue growth wouldn't be so torrid in the future -- another possible culprit for what's a fairly mysterious price decline.
In profit margins, Apple scored top marks by posting a whopping 11% net margin for the quarter. That's head and shoulders above the 3%-4% neighborhood it's loitered in during recent quarters.
While EPS is expected to triple (to $1.11) this year, the stock trades at 35 times forward earnings, which is rich compared with the 20ish forward P/Es sported by industry heavyweights Intel
In a word, iPod. The company may be called Apple Computer, but perhaps it should be called Apple Computer and iPod, given that while computer sales were $1.5 billion, iPod revenues weren't far behind at a cool billion.
But the same market newness that's opened the door for the iPod's growth has invited competition into Apple's arena -- an arena with fickle tastes, to boot.
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