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Apple CEO Steve Jobs holds a custom Intel Core 2 Duo processor used in the MacBook Air  (Source: Reuters)
It seems a bad move to bet against Apple when it comes to financial outlooks

Never one to keep silent of its accomplishments, Apple was quick to proclaim on Wednesday its resounding Q2 success, amid signs of a slowing consumer economy.  Analysts predicted early this year that Apple might struggle due to rising costs of flash memory, and perhaps unwillingness from consumers to pay $200+ for a piece of Apple electronics.  Unfortunately for Apple's detractors, this does not appear to be happening.

After a strong Q4 2007, and a strong Q1 2008, Apple unsurprisingly posted a stronger than ever Q2 2008.  Apple saw revenue rise from $5.26B USD in Q2 2007 to $7.51B USD in Q2 2008.  Similarly, net quarterly profit rose from $770M USD in Q2 2007 ($0.87 per diluted share) to $1.05B USD in Q2 2008 ($1.16 per diluted share).  This all bodes very well for Apple's stock shareholders.

The gross margin dropped from 35.1 percent in Q2 2007 to 32.9 percent in Q2 2008.  This was the only major negative in the report, and perhaps a sign that rising flash costs are indeed catching up to Apple.  While this may be a sign of trouble to come, Apple showed little signs of it in Q2 2008. 

A large part of Apple's gains were due to the popularity of its Mac computers, particularly the ultra-slim MacBook Air.  Apple reported sales of 2,289,000 Macintosh computers in the quarter.  This reflects a 51 percent unit growth and 54 percent revenue growth over Q2 2007. 

The company continues to do well with its iPods and iPhone, but saw largely stagnant growth.  Apple sold 10,644,000 iPods over the quarter, up 1 percent in units from last year, and 8 percent in revenue.  It sold a modest 1.7 million iPhones during the quarter.

Steve Jobs, Apple’s CEO, was quick to toot his company's own horn upon the news of the success.  He stated, "We’re delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple’s history.  With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."

Chiming in was Peter Oppenheimer, Apple’s CFO, who offered more glowing comments.  Oppenheimer noted, "We’re thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion.  Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00."

Apple has seen strong growth in the PC industry and may soon launch its new 3G iPhone.  However, the company has been hurt by an embarrassing campaign against the city of New York and its malware-like distribution attempts of Safari, which led to the company unwittingly encouraging the massive violation of its own EULA.

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RE: Of course
By JasonMick on 4/24/2008 11:24:23 AM , Rating: 3
That is simply not enough. You will not be cool until you start buying turtle necks, new balance, American Apparel long sleeve shirts (fair trade), and stone washed (fair trade jeans).

RE: Of course
By crimson117 on 4/24/2008 11:46:11 AM , Rating: 5
To be fair, you only need one black turtleneck and one pair of jeans.

RE: Of course
By daftrok on 4/24/2008 2:08:06 PM , Rating: 5
You also need to spend three grand on a laptop and go to Starbucks to pretend you're doing something cool like a family collage or editing a movie when in fact you're on Facebook.

RE: Of course
By MrDiSante on 4/24/2008 7:05:59 PM , Rating: 2
Sorry to topic-steal, but did anyone else notice how the article states that :
A large part of Apple's gains were due to the popularity of its Mac computers, particularly the ultra-slim MacBook Air. Apple reported sales of 2,289,000 Macintosh computers in the quarter.

however not a single MacBook Air number is given? I've not read one anywhere else either. Something tells me that if the MacBook Air were successful, Apple would be trumpeting the numbers for the world to hear.

At any rate: I think it's bending the facts at the very least to claim that Apple's success was particularly due to the Air, as there is NO evidence given nor seen. I'd even venture so far as to say that the MacBook Air sold poorly (judging by Apple's silence), as expected, because it is a useless and overpriced gimmick.

For the rest of it - congratulations Apple.

"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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