Subscribe RSS Feed
Apple Announces Earnings - Profits Jump 26%!
Posted On Tuesday, October 21, 2008 at at 4:24 PM by ChrisI hope some people listened and got into Apple. Apple stock is trading over 14% in after-hours. I don't know what it will open at tomorrow, but I'm sure it will be green.
SAN FRANCISCO (MarketWatch) -- Your next-door neighbor probably can predict what's going to happen with the economy about as well as Apple Inc. can.
That was the wisdom offered up by Apple's AAPL chief executive, Steve Jobs, who made a surprise guest appearance on the company's earnings conference call Tuesday, a move aimed at quelling investors' jitters about the economic downturn.
Jobs was ostensibly on the call to tout the stunning results of the iPhone, which outsold rival Research In Motion Ltd. RIMM in the quarter.
Jobs touted the fact that the iPhone was a big part of Apple's fiscal fourth quarter, with 39% of total revenue coming from the device. This explosion was due to the fact that the faster 3G iPhone was launched in July. The company said the 3G iPhone outpaced RIM in unit sales, shipping 6.9 million units in the quarter vs. RIM's 6.1 million units.
In the background, though, was the fact that sales of the Macintosh computers, formerly Apple's crown jewel, appear to be going in the wrong direction. In the quarter, Apple saw unit sales of the Macintosh continue to grow, albeit at a slower pace. Macs slowed to unit growth of 21%, down from 41% in the third quarter, 51% in the second quarter and 44% in the first quarter.
Apple executives noted, though, that Mac sales were still outpacing the rest of the PC market. Analysts asked if Apple planned to lower prices or offer lower-end products.
"We don't know how to make a $500 computer that is not a piece of junk and our DNA will not let us ship that," Jobs said.
Wall Street seemed to like Jobs' appearance on the call, driving Apple's stock in after-hours trading. Only time will tell how well Jobs know his customers. He predicted that in the current belt-tightening, Apple customers are more likely to "delay rather than switch."
--Therese Poletti
