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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 Reclaimer77 on 4/24/2008 4:12:21 PM , Rating: 2
Why are you using a MacBook vs Dell example ? Because thats the most favorable one, thats why. I was talking about desktop system, not laptops, and I think you know it. Last time I checked you didn't hook monitors up to laptops.

I see your point about the lower to mid end stuff. But when you said Apples pricing was competitive to the PC market, I'm sorry, you just have to get called out on that. Thats just not true.

RE: Of course
By Enigmatic on 4/24/2008 4:29:22 PM , Rating: 3
I just chose what is likely the most popular Apple computer and compared to a well-reviewed and well-priced Windows equivalent.

I've been repeatedly saying Macs are competitive under certain scenarios. When there products are just released and when they have a refresh of the specs. That doesn't happen very often. So most of the time they aren't competitive. You're misconstruing what I'm saying here. When the Mac Pro was just released it was cheaper than a similar-spec Dell (I think DailyTech had an article about this). And that's the highest-end Mac. But now, it isn't competitive. That's my point. I think most people are missing what I'm saying.

RE: Of course
By DASQ on 4/24/2008 6:46:46 PM , Rating: 2
Not to mention Dell's, at regular pricing, are overpriced. The only time I would touch a Dell is with a whole slew of discounts, freebies, bags, printers, etc.

Comparing a MacBook to an ON SALE Dell is a fair comparison. How often does Dell NOT have a deal on laptops? And when was the last time you saw a sale on Mac's?

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