MarketWatch reports Apple’s earnings were up 88% in the second quarter, with sales up 20%. They womped earnings per share estimates by 36%.
Stock’s hovering at 103 in after-hours trading.
The Macalope found this bit about how they’re going to account for iPhone sales interesting (well, as much as accounting can ever be interesting, anyway).
Because Apple is going to keep introducing new software features for free, it’s going to account for sales and earnings from the iPhone on a subscription basis for 24 months after the sale of a handset.
Translation: Investors should keep a careful eye on unit sales and cash flow from operations, not just GAAP revenues and net income.
Also means the company won’t have a repeat of the 802.11n enabler charge issue.
Tim Cook also claims the Leopard delay is a “one-time event”.
Also worth noting:
Apple has started to capitalize some of its software development, which has the effect of depressing apparent R&D spending. CFO Peter Oppenheimer says if you factor the capitalized software back in, R&D spending is going up.
The Macalope has made a mental note to keep an eye out for unwarranted griping that Apple’s R&D spending is going down.
Silly comment by Thomas about why Apple isn’t dropping prices as some component prices decrease:
Cook points out that Mac and iPod sales continued to grow at current prices. I think that means that Apple is not just sticking it to its suppliers, it’s sticking it to its customers, too.
Supply? Demand? Any of these things ring a bell, Owen?
UPDATE: Responding to a commenter who raises the same issue the Macalope did, Thomas says:
Clearly, keeping prices high is not hurting Apple, and executives may be hesitant to drop prices since they may not be able to raise them later if commodity prices rebound. But for now, Apple is getting away with charging customers considerably more for iPods and Macs than it’s costing Apple to make them.
Dude, that’s called margin!
Yeah, customers might not like it, but having a high margin with increasing sales? Investors eat that up with a spoon!