On Monday, Apple reported a $904 million profit on revenue of $6.22 billion for its fiscal fourth quarter, $1.01 per diluted share. The results topped analysts’ expectations, which came in at $.86 per share.

During Apple’s Financial Results Conference Call the following information was garnered:

  • Highest September Quarter revenue in Apple’s history
  • Record quarterly Mac sales
  • 32-percent growth in Desktop Mac segment
  • 37-percent growth over previous quarter in Notebook sales
  • 10.2 Million iPods shipped in the quarter, 17-percent growth year-over-year
  • iTunes Store has sold 3 billion songs and 100 million TV shows
  • iTunes Store continues to be third largest distrubtor of music in U.S. behind Wal-Mart and Best Buy
  • 1.1 Million iPhones moved in fourth quarter
  • iPhone has a positive user reaction with 95-percent saying they’d recommend the device to others
  • Retail stores generated record quarterly revenue of $1.25 billion, 42-percent growth year-over-year
  • As of the end of fourth quarter Apple had opened 197 stores, exiting the quarter with 12 new stores
  • Average revenue per store is $6.6 million
  • Apple noted that it will open 40 more stores in the coming year
  • New stores in New York, Boston, and for the first time in China.
  • For the December quarter Apple is targeting revenue of $9.2 billion with gross margin at 31 percent

Question and Answer highlights - Courtesy Blogging Stocks

  • UBS asks. In regard to guidance, they seem more conservative. What are they seeing that makes Apple so confident with that $9.2 billion. Apple replies that with the best products shipping, just eclipsed Mac sales record, iPod sales have accelerated after the transition, and the iPhone is doing well. Apple exited the Sep. quarter really well.
  • Piper Jaffrey “congratulations.” Gene Munster is asking about iPhone revenue share. Apple recognizes revenue from handset sales over 24 month period of time on a daily basis. Revenue from iPhone was $118 million in the quarter. Won’t get into detail about carrier agreement.
  • Best Buy stores, how many are up and running? 230 operating at the end of Sep. quarter. 270 expected by end of Dec. quarter. The impact it’s had: Apple is pleased, good results, looking forward to expanding.
  • Gartner of Citigroup is asking about channel inventory. Likes how low it is.
  • David Bailey of Goldman Sachs. What about the pricing strategy in Europe as it goes up as the dollar weakens? Apple says they set the price when they announced, it includes VAT and other duties. Direct sales were 57% of revenue, up from the previous quarter.
  • Morgan Stanley: Europe outgrew the US. What’s up there? Apple, year over year Europe has been doing well. It’s 4 times the IDC expected gain.
  • Shannon Cross asks about revenue again, and what the biggest drivers quarter over quarter are. Mac, or iPod. Apple replies: the holiday quarter is the big quarter for iPods, and Apple is shipping the best for the December quarter. Apple thinks sales accelerated after the iPhone price reduction, selling 1.1 million, for a total of 1.4 million.
  • Bear Stearns: when are we going to hit 3 million iPhones sold? Apple: we’re selling these things faster than iPods, and we’re in Europe, and we’re going to be hitting Asia in ‘08.
  • What about Japan, which has been lagging for some time? Japan continues to be Apple’s most challenging market. The only market they’re not growing in. However Mac sales are doing well, best year over year in 7 quarters. iPod had a difficult compare due to a large sale to a telecom company there.
  • Lehman Brothers asks about the rebate issue with the iPhone. In regards to the $100 credit it will be accounted when the customers redeem, and charge it to costs of goods sold. Most are expected to be redeemed by the end of December.
  • Stanford Bernstein asks about price elasticity in regards to the iPhone rebate. How did the price cut impact sales? Apple: happy with elasticity. Enabled Apple to surpass the 1 million end of quarter goal. Some have been sold to people with intention to unlock, guess that 250,000 of the 1.4 million sold that intend to unlock, many of those after the price cut.
  • Apple: saw an acceleration once the price cut happened.
  • RBC Capital Markets: can you talk about Mac momentum and shifters? Apple: had an incredible record, breaking record by 400,000 units, and twice as many macs as done in ‘04. Best macs being shipped in history, and incredible reception in the new iMac. Third, 120 million iPods sent mostly to Windows users. Over 50% of Macs sold are to new Mac users. All these lead to momentum that gives 11 quarters of the last 12 that Apple has grown faster than the market.
  • iPods shipping to Windows drives Mac sales. In Europe will iPhone and iPod sales help boost Mac sales? Apple: we’ll see. Would point out that European business in the Mac area grew 47%.
  • Bank of Montreal: how does Apple think about increasing its sales via channels? Apple: Asia/Pacific is the fastest growing region. Have added over 2,000 retail points.
  • 2g versus 3g phone in going into Asia. Apple won’t say anything.
  • Pacific West Securities asks about video content on iTunes and whether it’s changed due to the increasing amounts of content out there. Apple: we have the largest library of content available to customers, over 5 million songs, 500 movies, hundreds of TV shows.