Apple sees best quarter, best year in company history
Posted by Dennis Sellers 
Oct 11, 2005 at 3:43pm
And it just keeps getting better …. Apple’s financial results for its fiscal 2005 fourth quarter that ended Sept. 24 see the company reporting the highest revenue and earnings in its history. Apple posted revenue of US$3.68 billion and a net quarterly profit of $430 million, or $.50 per diluted share.
These results compare to revenue of $2.35 billion and a net profit of $106 million, or $.13 per diluted share, in the year-ago quarter. Gross margin was 28.1 percent, up from 27.0 percent in the year-ago quarter. International sales accounted for 40 percent of the quarter’s revenue. Apple shipped 1,236,000 Macs and 6,451,000 iPods during the quarter, representing 48 percent growth in Macs and 220 percent growth in iPods over the year-ago quarter.
For fiscal 2005, the company generated revenue of $13.93 billion and a net profit of $1.335 billion, reflecting annual growth of 68 percent and 384 percent, respectively, and representing the highest annual revenue and net profit in the company’s history.
“We’re thrilled to have concluded the best year in Apple’s history, with 68 percent year-over-year revenue growth and 384 percent net profit growth,” CEO Steve Jobs said in a press release. “This is the direct result of our focus on innovation and the immense talent and creativity at Apple. We could not be more excited about the new products we’re working on for 2006.”
Added Chief Financial Officer Peter Oppenheimer: “We’re very pleased to report 48 percent year-over-year growth in Mac shipments in quarter four, as well as our 10th consecutive quarter of record iPod sales.” Looking ahead to the first quarter of fiscal 2006 (which will span 14 weeks), Apple expects revenue of about $4.7 billion.
“We expect GAAP earnings per diluted share of about $.46, including an estimated $.03 per share expense impact from non-cash share-based compensation, translating to non-GAAP EPS of about $.49,” Oppenheimer says.
darknite Says:
Sorry, I’ve seen it happen time and time again. Apple outperforms, but the stock drops. Is it this way with other companies also?
Maybe the stock market people need to get their commissions/ fees and bonuses, and other compensation cut when they are wrong. Yes, thats a little simplistic, BUT I’ve heard for the last 15 years, retailers moaning and complaining that Christmas holiday sales aren’t as good as they predicted. With such a huge “losing” streak, maybe everyone should set more realistic expectations.
In Apple’s case, (past) iPod sales were through the roof, sales and profits were at record highs, financial analistas complained about computer sales. This quarter, revenue and profits, off the chart, computer sales are up, but iPods fell a little short of admittedly overblown expectations. I guess analistas aren’t happy unless they can complain about something and devalue it.
Posted on October 11, 2005
MacManic Says:
Yeah, that confuses me too. I read this report which seems to conflict with what everyone is saying.
“Expectations for Apple’s results were pretty high, and they needed to beat estimates for us to see a boost in the stock this afternoon. Revenue came a bit lower than expected and that’s why we are seeing Apple dip a bit,” said Jim Fisher, a fund manager at Univest Wealth Management, who owns Apple shares.
Weren’t market estimates around 37 cents per share with apple targeting 32 and delivering 50?
If anyone can shed some logic on this situation please post a reply.
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MacManic
“In Jobs We Trust”
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Posted on October 11, 2005
Neo Says:
Don’t try and figure out Wall Street. Apple stated in July that they would do 32 cents for the September quarter, they did 38 cents not counting the tax benefit of 12 cents. So that’s still 20 percent higher than guided. The shipments of iPod were expected by some to be around 7.8 million, Apple did 6.5 million with a staggering backlog for nano which should have calmed the market.
I thought that one analyst took a cheap shot by asking about Steve Jobs health, which he could have done privately, knowing Apple wouldn’t go into such matters. Sorry, that was a cheap shot and anyone who heard it knows it was misplaced.
Some sell off is always due to profit taking, but I wouldn’t read much into this “common” sell after Apple delivers. Does it ####? I’m used to it. Someone said that they should have sold at $55/share. If you’re a long term investor, you know that Apple will soar through $55 over the next 12 -18 months.
Anyways, the numbers are great and being a shareholder myself, I’m pleased with their performance! The bonus comes with tomorrow’s announcements. Way to go Apple!
Cheers!
Neo
Posted on October 11, 2005
MacManic Says:
Thanks Neo, I only recently bought my Apple shares so I was a little shocked. My Dad just told me if I believe in the company then hold on. You give the same advice.
I still find it strange that a 7% drop in suggested gross revenue can cause a 9.5% drop in a share price… oops I’m still trying to “figure out Wall Street.”
I’m looking forward to seeing what Apple come up with tomorrow.
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MacManic
“In Jobs We Trust”
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Posted on October 11, 2005
machead Says:
Don’t analysts take the bus to work? So who cares what they say. They’ve been signing Apple death certificate for over 30 years and the company is still with us. As those Delphi / GM people how good they are, not to mention Sun. Keep at them Apple!!!
Posted on October 11, 2005
Johnny Appleseed Says:
MacManic: I think the shortfall was in revenue and iPod sales, not earnings per share. They didn’t cut Apple any slack despite the fact they were transitioning from the iPod mini to the nano (and still managed to sell a million nanos in 17 days). When the full momentum of the nano is revealed next quarter, Apple will go gangbusters.
Posted on October 11, 2005
Frank Petrie Says:
The very same thing happens with Intel shares, ironically. This never happens with Microsoft shares because they always lowball their numbers.
Posted on October 11, 2005
Neo Says:
The BBC reports that revenues rose 56% to 3.8bn, analysts had expected 3.74bn. Give me a break about revenue expectations. That’s what, a 1.5% miss. That’s an excuse. It’s Apple’s multilple that gets nicked a bit which has nothing to do with dissappointing anyone. It’s the short-sellers that want to make something of this and Apple will punish them tomorrow when they likely announce a high-end iPod for Xmas. Chicken-littles (short sellers), run for the hills - because you’re going to get squashed!
Posted on October 11, 2005
Neo Says:
Opps, typo.....rose 56% to 3.68bn (not 3.8bn).
Posted on October 11, 2005
Derrick Says:
A little dissappointing in terms of the reaction ... however, I looked at the share amounts in the after hours trading and noticed that the vast majority were the minimum block (100 shares) ...
I think one of the most encouraging number is the continued increase in Mac sales ... I am sure iPod sales will be spectacular for Christmas once Apple catches up with the demand.
It will be very interesting to see what is announced tommorrow (I can’t wait :) ... I think that Apple has a double edged sword now that they have Wall Street’s attention ... any sort of news/rumor/speculation can have a dramatic impact on the stock in either direction.
As far as Oct 12th ... I hope some of Neo’s predictions come true.
Posted on October 11, 2005
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
Chris Says:
Yet the stock takes a big dive after hours? Does this mean Apple stock is back to its old ways, where good news brings on a stock drop, and bad news brings on a stock drop? Ouch. I shoulda cashed out at $55…
Posted on October 11, 2005