Apple’s ‘best quarter ever’ coupled with dim forecast

Apple Inc. declared its fiscal first quarter, the greatest in its history in terms of revenue and earnings.
That unambiguous claim could not carry the day, however, as the company issued a tepid outlook for the current quarter, which sent its stock tumbling in after-hours trading that appeared to reflect widespread fear of a fall-off in consumer spending, fears that sent the Nasdaq down 2%.
Apple’s stock lost about 12% of value to dip under $137 per share shortly after the news.
Still, Apple’s apparent feat is worth examining, whether you’re in the wireless telecom, portable digital media or computing businesses. The results seemed to reflect a solid alignment of product innovation, envious marketing and premium pricing.
The Cupertino, Calif.-based company earned revenue of $9.6 billion and net profit of nearly $1.6 billion, up from the year-ago quarter’s $7.1 billion revenue and $1 billion in profit, jumps of 35% and nearly 60%, respectively. Apple’s ability to ply international markets was reflected in the numbers: 45%, or nearly half, of its revenue came from sales outside the United States.
Apple said it forecast its fiscal second quarter revenue at about $6.8 billion, below analysts’ consensus of about $6.99 billion, which left the company’s stock at the mercy of after-hours’ traders.
In the wireless telecom world, however, Apple’s iPhone narrative was convincing. Sales reached 2.3 million units for the quarter, which is about 25,700 units per day, well above the 20,000 units per day sales rate sustained since the device’s initial launch last June 29, cited by CEO Steve Jobs at last week’s MacWorld 2008 conference. That would appear to indicate that iPhone sales accelerated during the quarter, perhaps as a result of the device’s launch in the United Kingdom, Germany and France in November, midway through the quarter.
(Apple also shipped 2.3 million Macintosh computers, a 44% jump in unit growth, which earned the company a 47% jump in revenue over the year-ago quarter. Interestingly, the company sold 22.1 million iPods during the quarter, a mere 5% boost in unit growth and a more modest 17% growth in revenue over the year-ago quarter.)
Jobs declared himself “thrilled,” as well he might. The Apple board will undoubtedly find a way to reward the multi-billionaire CEO, who officially works for a salary of $1 per year. (Just don’t mention back-dated stock options. That ploy hasn’t aged well and Apple’s conduct remains a subject of enquiry.)
Indeed, any glee from competitors at Apple’s tepid forecast for the current quarter will be tempered by fear that it reflects market conditions that could take away a bite-sized chunk of their own shipments and earnings.