The Apple Financials Report: No Steve Jobs is Not the Only Employee

January 19th, 2011

There’s an unfortunate feeling in some parts of the media that Steve Jobs is the beginning and the end of Apple. If he’s away, even temporarily, the company simply cannot grow at record levels, and is doomed to return to that beleaguered status it occupied for so many years.

That in large part explains why the news of his third medical leave since 2004 knocked the stock price down some 5% at the start of trading Tuesday; it recovered to a roughly 2% loss ahead of the announcement of Apple’s quarterly financials.

Keeping up with most expectations, Apple’s holiday quarter had blowout numbers. With record revenues of $26.74, Apple earned more than $2 above most financial industry estimates. Profits rose more than 77% to $6 billion, or $6.43 per diluted share. These numbers compare to revenue of $15.68, a net quarterly profit of $3.38 billion, or $3.67 per diluted share, last year.

Three of Apple’s four major product categories had record sales. Some 4.13 million Macs were sold, an increase of 23 percent over last year, surprisingly good news at a time when overall PC sales are flat. A total 16.24 million iPhones were sold, representing an 86% growth rate over last year, and iPad sales cataloged 7.33 million units, also above estimates.

When it comes to the Mac lineup, portables were king, with some 2.9 million of them sold during the quarter, representing a roughly 70%, with the balance covering the Mac mini, iMac, and Mac Pro. These numbers compare to some 63% note-books sold in the year-ago quarter, when the new iMac line was garnering a surprising percentage of total Mac sales.

As expected, iPod sales declined seven percent to 19.45 million, still not to shabby, considering the rest of the digital music player makers sell far, far less.

“We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales,” said Apple’s ailing CEO, Steve Jobs. “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.”

According to CFO Peter Oppenheimer, Apple is offering a conservative estimate of revenue amounting to $22 billion, and diluted earnings of approximately $4.90 per share, for the current quarter.

If you want to explore the figures in more detail, you can check the report posted at Apple’s site.

During the quarterly conference call with financial analysts, both Oppenheimer and COO Tim Cook, who is managing the company’s day to day affairs in Jobs’ absence, answered the usual softball questions from industry analysts.

The conference call also brought news that Apple’s stellar Mac sales were heavily influenced by the MacBook Air and MacBook Pro. Apple doesn’t break down sales figures to cover individual Mac models, other than the distinction between portable and desktop, but it does seem clear that the refreshed and reinvigorated MacBook Air was well received by the public.

This one came as a bit of a surprise to me: Although it was largely believed that the iPhone’s production has caught up with demand, Cook reports that Apple still has a sizable backlog, and that more units could have been sold if they could be built faster. However, Apple appears to have caught up with demand for the iPad, despite the fact that sales outlets have expanded greatly.

When it comes to the prospect of iPad cannibalization of Mac sales, Cook admitted “there is some cannibalization,” but then added a contradictory comment: “But I also think there is a halo effect.”

So maybe it’s six of one, half a dozen of the other?

Cook says: “We have introduced millions of people in Asia to Apple through the iPhone. And we’re now introducing many more through the iPad, and I think some of those decide to buy a Mac.”

“If this is cannibalization, it feels pretty good.”

As usual, Apple’s crew deflected any questions about future products and product directions.

When it comes to enterprise penetration, Apple says that some 80 of the Fortune 100 companies are testing or deploying the iPad. A similar number are using iPhones. So much for the ongoing story about Apple’s failure to make progress in the business market.

In all, some 160 million iOS products have been sold, which means 160 million computing devices that cannot run Adobe Flash, and probably will never be compatible. With the prospect of over 100 million unit sales next year across the entire lineup, it seems clear from this vantage point that Flash is going to become less and less relevant. Of course, Google hasn’t noticed, despite the incredibly poor performance provided by Flash on the Android OS.

Despite some expectations from the media, there were no requests for further information on the health of Steve Jobs, which might be expected, as Apple has made it clear nothing more is going to be said on the subject, at least for now. Also missing in action was any news about total quarterly sales of the Apple TV. You have to assume that perhaps a few hundred thousand units were sold after that initial announcement about one million sales a few weeks back.

Then again, that’s just Lilliputian when it comes to a company the size of Apple, and I expect Apple TV will remain a hobby, at least for a while. In the meantime, it appears that Apple’s stock price is poised to recover in the days to come.

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4 Responses to “The Apple Financials Report: No Steve Jobs is Not the Only Employee”

  1. Jon T says:


    Panda. Native to China. Eats, shoots and leaves.

    Panda. Native to China. Eats shoots and leaves.

  2. DaveD says:

    Holy Dogcow!

    Took the “wayback machine” to reflect on the very first quarter earnings with Steve Jobs starting out as the iCEO of Apple Computers.

    “Apple Reports First Fiscal Quarter Results

    CUPERTINO, California – Jan. 14, 1998 – Apple Computer, Inc. today announced financial results for its fiscal 1998 first quarter which ended Dec. 26, 1997. For the quarter, the Company generated revenues of $1.6 billion and unit sales of 635,000. The Company recorded a quarterly net profit of $47 million, resulting in basic and diluted earnings per share of $.37 and $.33, respectively. Apple recorded a net loss of $161 million, or $(1.26) per share, in the September quarter, and recorded a net loss of $120 million, or $(.96) per share, in the year-ago quarter. […]”

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