Apple Computer Inc. (Nasdaq: AAPL) sure hates to deliver all the good news at once. Officials were vague and obviously holding out more information until next week's MacWorld expo.
The company again creamed Wall Street estimates with fiscal third quarter earnings of 69 cents a share. But those ever-present Apple doomsayers might harp on revenue. Apple is getting Wall Street's respect, but now the company is a growth story not a turnaround tale.
| Apple: Best is yet to come? |
Sales in the third quarter were a bit below expectations and Fred Anderson, Apple's financial chief, lowered sales expectations for the September quarter because of product transitions. Revenue and unit shipments will both be "up slightly" in the next quarter, he said. That guidance was below previous guidance. Anderson was comfortable with estimates of 76 cents a share for its fourth quarter.
But those revenue concerns, if they appear at all, may only last a few days. Anderson said Apple is expecting its December quarter sales to be strong sequentially and year over year. Anderson said all four of Apple's products would be shipping in volume in the December quarter. Apple currently has three product lines, but as is custom, Anderson "won't comment on unannounced products."
In fact Anderson didn't say much of anything to analysts. Let's face it -- Anderson is a good soldier. Why steal Steve Jobs' thunder at MacWorld next week?
Apple's poorly kept secret is expected to be a notebook computer for consumers, an iBook if you will. Consider Apple's earnings just the first installment of a carefully planned buzz bonanza that will lead into next week.
Other zingers that may emerge next week include some talk of Apple's Internet service plans. The so-called "free PC" movement will require Apple to have an Internet service strategy. Anderson said a plan will be unveiled within six months.
Although analysts want to see better sales growth from Apple, things are looking pretty good. Apple, unlike PC makers, hasn't been drawn into the price wars (see ZD Market Intelligence data). The company moved 487,000 iMacs in the quarter out of a total of 905,000 units. And iMac prices haven't moved from the $1,199 price point. Anderson added that iMac prices won't budge as long as demand remains high.
Of course that product mix (54 percent iMacs), led to lower revenue per system, but that may not last long once the iBook enters the mix. Apple's revenue per system fell to $1,683 from $1,813 last quarter and $2,019 a year ago.
Overall, Apple's world looks pretty good. Of course you'll have to tune in next week to hear more from them.
AMD: A head rolled, but it was the wrong one
The resignation of AMD's (NYSE: AMD) technology chief S. Atiq Raza was a shocker. Amid big losses and frequent blunders, Raza's departure would be a sign that there was some accountability at AMD, which lost $162 million, or $1.10 a share, in its second quarter.
Shame the wrong head rolled. Raza was AMD's big hope. He brought a bit of credibility to the table and was supposed to become the new leader for AMD in three years. Now chairman Jerry Sanders III will be in charge of fixing AMD's woes and his track record is pitiful. Sure Sanders said AMD could ship 1 million Athlon chips in the fourth quarter, but who will believe him? Sanders and the company's board of directors is, and has been, AMD's problem.
The official reason for Raza's exit was "personal reasons," but it's a bit odd to leave in the middle of a turnaround project. Raza and Sanders may have had a falling out. Or maybe things are worse than we thought at AMD. Is that even possible?