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Apple CEO Steve P. Jobs holding the elusive white iPhone 4  (Source: The Star)
Company continues to put analyst estimates to shame

Another quarter has rolled around, so did a bullish Apple embarrass the Wall Street analysts yet again?  Such an event has seemingly been a quarterly tradition by now.  But this quarter's earnings reports, while sticking true to tradition in revenue and several other areas, actually fell short of analyst's typically overly conservative expectations in two areas. 

This quarter's earnings will likely be over-scrutinized in the face of much bigger questions facing the trendy gadget maker.  While there'd been a bit of optimism surround the upcoming iPad 2 and availability of a CDMA (3G) iPhone on Verizon, most Apple-related financial chatter over the past two days had centered around the company's CEO, co-founder, and creative guiding hand, Steven P. Jobs taking a medical leave of absence (the CEO has battled cancer over the last decade and is recovering currently from a liver transplant).

A strong earnings report wouldn't completely silence concerns about a possible future Apple leadership crisis, but it might offer a decent distraction.

Apple's official accounting of calendar Q4 2010 earnings trickled in at around 4:30 p.m. on January 18.

Revenue was $26.74B USD, a new record, grossly surpassing the consensus expectation of $24.4B USD and the "high" expectation of $25.5B USD.  Earnings per share (EPS) similarly whipped expectations to the tune of $6.43 USD, versus a consensus estimate of $5.38, and a "high" estimate of $6.02.

IPhone and iPad shipments beat expectations, recording 16.24 million and 7.33 million, respectively, units shipped, versus respective expectations of 15.5 million and 6.2 million.  

If there was one trouble spot in the earnings report, it was the shipments of Mac computers and iPods, which fell short of expectations.  Apple only shipped 4.1 million Macs vs. a consensus of 4.3 million, and only shipped 19.45 million iPods vs. a consensus expectation of 20.3 million.  

The iPod shortfall is perhaps expected -- sales of the portable music player have slumped as tablets and smartphones have boomed, filling many of the niches once filled by the portable music player.  The lower than expected Mac shipments are a bit more troublesome and a sign perhaps that Apple is slowing in its quest to gain ground on industry leaders Dell and HP.  The Mac shipments, while lower than expected, represented a 23 percent increase from shipments a year ago.  The iPod shipments, on the other hand, represented a 7 percent drop.

Despite the couple of weak metrics, the record revenue, strong iPad/iPhone sales, and higher than expected revenue/EPS guidance for Q1 2011 all culminated to a generally positive reception of the report.  While it is early to fully characterize the net impact, Apple stock in resumed after hours trading has swung upwards $7.23 USD/share, a 2.12 percent gain that almost erases a 2.25 percent Tuesday drop, which was driven by the aforementioned leadership concerns.

Apple CEO Steve Jobs, put in a good word, enthusing, "We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales. We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on."

Note: We originally overstated the revenue as $27B USD.  It is actually slightly lower ($26.74B USD).  Some have questioned the analyst consensus surrounding Macs.  We have consulted several different publications, and the figure 4.3 million is consistent across them and appears correct.  Apple also fell short of its own Mac sales predictions.

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RE: Nice
By semiconshawn on 1/18/2011 9:25:58 PM , Rating: 3
Apple dies with Steve Jobs. I know you know it and so does the Market. They will lose content partners there will be power struggles infighting and slower product cycles. That man runs apple. You just dont replace that with next guy in line. Worship your false god Tony he is about to fall and bring the church down with him.

RE: Nice
By nuarbnellaffej on 1/18/2011 9:35:17 PM , Rating: 1
Dude you're pretty fucked up..

RE: Nice
By dark matter on 1/19/11, Rating: 0
RE: Nice
By semiconshawn on 1/19/2011 4:45:02 PM , Rating: 3
Please point out the non Capitalist enconomies that are inovating new products and moving tech forward.

RE: Nice
By Aloonatic on 1/19/2011 7:51:44 AM , Rating: 2
I think that you might be exagerating slightly. His departure, however it happens, would not be good for the company, of course, however...

.. regardless of what goes on with Macs, in their iProduct line up, they have a pretty good business going that doesn't really need Steve at the helm. I know that people here like to think that everyone who bought an iPod/iPhone/iPad were all brainwashed when they heard Steve's keynote speech and rushed out and bought one of his devices purely because they love his black turtle-neck and blue jeans style, and that he designed and manufactured the prototypes in his garage all by himself, but that's not how it happened.

He's influential and would be missed, but not pre iProduct influential.

RE: Nice
By Shadowself on 1/19/2011 7:51:24 AM , Rating: 1
First, Jobs has never invented *anything*. He has never been the "innovator" at Apple or anywhere else he's been. Every idea for something new and interesting at Apple has been brought to him by others. Jobs' stregth -- and it *is* better than almost anyone else in the field -- is to be able to pick from a bunch of new ideas the few that people will want to buy.

Second, Jobs has been gone twice since his return in the 90s. Apple didn't fall apart either time.

Will Apple be the same without Jobs? No.

However, it might actually be better! Jobs believes down in his very DNA in high margins. The margins are higher than are necessary to keep fueling the research and development to keep the pipeline full of new, and in many cases innovative, products. Who's to say that the next guy (no pun intended) will not lower the margins just a bit to expand the market share AND still fuel the R&D budget too?

RE: Nice
By PrezWeezy on 1/19/2011 5:22:11 PM , Rating: 3
High profit margins give the impression of high quality, rightly or not. But that is what gives Mac's the idea that they are better, the idea that their quality is much higher. You can argue if that is true all you want, but that's why they are thought of the way they are. Also, it is a status thing. Just like owning a Benz. Whether it is true or not doesn't matter, what matters is that if they drop the price, they lose the image, and Apple is built on image.

RE: Nice
By Aenslead on 1/19/2011 11:31:28 AM , Rating: 2
That's why Jobs is getting cloned, so Apple becomes eternal, too.

RE: Nice
By Tony Swash on 1/19/2011 11:43:32 AM , Rating: 1
Apple dies with Steve Jobs. I know you know it and so does the Market.

It seems you are wrong.

Apple shares rose today.

I think we may have just passed an inflection point.

A post Steve Jobs Apple is now a prospect that does not inspire fear or anxiety. During his previous leaves of absence Apple continued to fire on all cylinders. The company has been re-made so well that it no longer need Steve Jobs. I think he will be glad about that.

I very much hope Jobs overcomes his health problems, just like I would hope anybody else would. I also hope that he returns to Apple because I think he has lots left to do and achieve. But whether he does or doesn't return is no longer a make or break deal. Apple is too big, too strong, too powerful and too well run for one man to matter anymore. As I said an inflection point.

RE: Nice
By semiconshawn on 1/19/2011 4:17:51 PM , Rating: 1
Im wrong? Steve Jobs died. Im sorry. Oh wait no im not wrong. Your an idiot.

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