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1/22/2008
06:12 PM
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Record Apple Revenue Fails To Impress Wall Street

Apple said it shipped 2,319,000 Macintosh computers, representing 44% unit growth and 47% revenue growth compared with the same quarter last year.

Amid worries about a global economic slowdown, Apple stock plummeted in after-hours trading despite record quarterly earnings that exceeded conservative guidance figures. As of 5:35 p.m. EST on Tuesday, Apple's stock was down 13.10% from its 157.45 close.

Apple on Tuesday reported revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share. Analysts had expected something more along the lines of $9.46 billion.

"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," Apple CEO Steve Jobs said in a statement. "We have an incredibly strong new product pipeline for 2008, starting with MacBook Air, Mac Pro, and iTunes Movie Rentals in the first two weeks."

Apple said it shipped 2,319,000 Macintosh computers, representing 44% unit growth and 47% revenue growth compared with the same quarter last year. The company sold 22,121,000 iPods, reflecting unit growth of 5% and revenue growth of 17%. It sold 2,315,000 iPhones during the quarter. As of last week, Apple had sold about 4 million iPhones since the device went on sale last summer, and it expects to meet its goal of 10 million unit sales by the end of 2008.

The good news for Apple is that Mac sales are booming. "The Macintosh business generally is on fire," said Tim Cook, Apple's chief operating officer, during a conference call for investors.

Much of the Mac's success has been because of the strong performance of Apple's retail stores, which saw 53% retail sales growth from a year ago. Apple CFO Peter Oppenheimer said that more than half of the people purchasing Macs at Apple's retail stores were new to the Mac platform.

Financial analysts on the call expressed concern that Apple's iPod sales may be slowing. Oppenheimer dismissed such worries. "We don't think that revenue growth like this is characteristic of a saturated market," he said.

At the same time, it's clear that Apple is concerned about the future of the iPod, in part because owning an iPhone makes owning an iPod redundant. Oppenheimer insisted that the iPod market is bigger than the market for simple music players. "We believe that one of the iPod's future directions is to become the first mainstream mobile Wi-Fi platform," he said.

Apple's shine may remain obscured by the stormy economic climate for a while. Oppenheimer, however, sounded undaunted. "We'll leave the economic forecasting to others and we're just focusing on our business," he said.

In a related announcement, Apple began offering an iPod nano with a pink exterior. The $199 music player will ship before Valentine's Day and has the same features as the other 8-GB models.

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