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
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.