Wednesday, April 21, 2010

AAPL F2Q10 Earnings 04/20/09-(Daren Pon)

Revenue was $13.5 billion, a 49% increase year over year. Net income rose 90% year-over-year to $3.1 billion. Margins were slightly higher than expected at 41.7% versus guidance at 39%. Cash and short-term securities increased from $39.8 billion to $41.7 billion quarter-over-quarter. This was the best non-holiday quarter in Apple history.After yesterday's earnings release after the bell, Apple shares closed today at $259.22, for a gain of 5.98% for the day.

Strength was attributed to iPhone sales doubling and strong momentum across the boards, allowing Apple to avoid the great magnitude of their normal seasonal sales declines after December. New Intel processors and NVIDIA graphics chips were added to the Apple's computer and laptop lines providing better performance, crisper graphics, and improved battery life. Mac revenue increased 33% and iPod revenue grew 12% year-over year. iTunes delivered over $1.1 billion in sales, a quarter best. 8.75 iPhones were sold, a year-over-year increase of 131%, crushing the IDC estimate of 41% due to expansion in Asia, Australia, Japan, and Europe. As mentioned in an earlier post, the iPhone OS4 is due this summer and will have multitasking, folders, improved enterprise support, and iAds. Retails sales increased by 22% year-over-year.

I still feel that Apple will outperform the broad market going forward this year due to their premium product lineup, an unparalleled user experience, and an application market that is light years ahead in development of quality software (I own a Motorola Droid, the Google Marketplace is a joke). Every single community service related event on campus with a raffle/prize is using either an iPad or Apple gift certificates to draw in students and the Apple store is STILL always crowded at Crossgates Mall. I am raising my one year price target to $315, looking forward for a potential Verizon iPhone contract this summer and continued increases in market share in the Mac product segment as iPhone users spill off into new Mac owners.

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