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AAPL Stock: 100.11 ( -0.64 )

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A "Reality Check" for Apple's Q3 numbers?

updated 05:10 pm EDT, Thu July 20, 2006

Reality Check for Apple

Apple's strong Q3 results, along with record Mac sales, are not all what they have been touted as, according to one columnist. MarketWatch's Herb Greenberg has posted a "Reality Check" on Apple stock, noting that while Apple posted impressive Q3 2006 numbers, the trend is still down for Apple. "So, what's not to like? Plenty, especially when you consider that iPod unit sales, from a quarter ago, tumbled 5 percent -- the second straight quarter of declines," the columnist noted. "And while iPod unit sales were up 32 percent year-over-year, that's down from the prior quarter's 61 percent year-over-year gain."

While iPod unit shipments were up, iPod revenue was down 13 percent year-over-year--in part to the due to the introduction of the low-end 1GB Nano at $149. Slower iPod shipments also decreased its average revenue per store, according to Apple.

Greenberg notes that most of the gain in operating margins was due to lower component costs and better expense control--both of which Greenberg believes is is not sustainable.

He also noted that much of the increase in Mac sales--almost 12 percent year-over-year because of surging laptop sales--was due to pentup demand of Intel-based portables and strong sales to higher education, which Greenberg was hestitant about calling "broad-based," despite IDC numbers that shoed surging marketshare in the US and a doubling of portable marketshare this year.

In addition, Apple's lack of openness about its operating segments disgruntled Greenberg: "the company said zero about changing the way it discloses data on its operating segments, the focus of several items here. Didn't think they would."




by MacNN Staff

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Comments

  1. howdesign

    Joined: Dec 1969

    0

    no new ipods

    It's simply because of the lack of new models of iPods. This stretch of the same products has been one of the longest since the birth of the iPod. Once Apple rolls out new iPods (hopefully soon!), sales will spike again.

  1. QualleyIV

    Joined: Dec 1969

    0

    What a loser...

    Some people just really, really hate to see a company do well. My guess is that this douche bag shorted AAPL on his belief that the stock would tumble on the earnings result and now he's feeling the pain.

    Oh, and nice analysis on the revenue numbers. Sure the MacBook was just an anomaly representing pent up demand, that never happens with PRODUCT CYCLES. Let's see, I'm sure there won't ever be a new MacPro (or whatever it will be called) or a new iPod in coming quarters. And, of course, none of those products will leverage pent up demand...

    Stupid fool.

  1. GORDYmac

    Joined: Dec 1969

    0

    Well...

    Wouldn't the last two quarters be the quarter AFTER Christmas (Q1) and the end of the school year(Q2)?

    What...ever...analysts!

  1. jhorvatic

    Joined: Dec 1969

    0

    Baloney!!

    Baloney!! You can spin anything into whatever you want if you try hard enough and this stupid analist is trying very,very hard to make a great quarter for Apple seem not so great when the fact is it was. Must be a PC bias Windoz user who just can't stand it when Apple does better than the rest of the crappy PC industry. Sorry but this just doesn't fly goonberg!

  1. jumbojet

    Joined: Dec 1969

    0

    sequential declines...

    You mean to tell me that Apple sells fewer iPods after the Christmas season than they do during the holiday quarter? SHOCKING!!!

  1. freakboy2

    Joined: Dec 1969

    0

    yeah another retred

    It's not a big surprise. Also, how many MP3 players are being sold... Did apple lose market share? Did the market just stop growing 65% year over year? I'm shocked.

    IF this guy would do some math, he'd find out that if the market grew 65% per quarter for another few years, apple would be selling more ipods per quarter than there are people on the fricking planet.

    It's planing off. Planing off at 8 million+ per quarter is pretty seriously amazing.

    As others have said, people would be more likely to upgrade old ipods if there were new models to get with new features. It'll come.. Wait for it.. wait for it.. wait for it..

    blam!!! ANother 50% growth quarter.

    whether it's a good time to buy apple stock or not. I wish i'd just bought some at 52.

    LOL

  1. spazmac

    Joined: Dec 1969

    0

    Beleaguered Apple should-

    just buy back all the stock and close up shop.

  1. kw99

    Joined: Dec 1969

    0

    Pentup demand

    > pentup demand of Intel-based portables

    Much of that so-called "pentup demand" came from Windows laptop users. They finally have a Mac alternative that can run Windows. This demand will continue for a long long time. This is one of those "analysts" who uses intentionally flawed logic to reach his desired conclusion.

  1. bommai

    Joined: Dec 1969

    0

    Fiscal Q3 ended in June

    gordymac - Apple's Fiscal Quarter 3 ended in June. Apple's fiscal year 2006 ends in September. That is what the analysts are referring to.

  1. eldarkus

    Joined: Dec 1969

    0

    re: pentup demand

    Not to mention that Apple's laptop running windows is faster than ANY other laptop.

    A local mac shop had an Adobe rep in running Premier Pro 2. It ran over 20% faster than his top of the line Dell.

    pentup demand?? doubtful...

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