Apple Posted $43 Million Q2 Profit

, $40 million after excluding one time revenues and costs. 751,000 Macs were shipped during the quarter (300,000 iMacs; 55,000 iBooks; 12,000 Cubes; 250,000 Power Macs; 134,000 PowerBooks), up 14 per cent from Q1. iMac, iBook, and Cube sales are down from Q1 but Power Mac G4 and PowerBook G4 sales are up. Sales in Japan are up 75 per cent over Q1. Here is Apple's press release.

Apple held a short web cast conference call on the second quarter results. There were few analyst questions. Here is Dana Baggett's report on the call:

"The Apple press conference started a few minutes late and went until 5:25 PM. Analysts had the press release to refer to, but Fred Anderson hit the highlights. He said results for the quarter exceeded expectations, with $40 profit from $1.43 billion in sales, a third of which came from Apple's internet stores worldwide.

Channel inventory including product in transit is down to four weeks; it was over five at the start of the quarter. In answer to an analyst's question Fred said that was an optimum level; any lower and stockouts could occur.

115,000 Titanium PBs shipped in the quarter; backlog of orders for them should be down to "normal" by the EOM. Mac OS X sales were $19 million in one week!

Gross margin was 26.9% for the quarter. Apple holds $4.1+ billion in cash and short-term investments, which Fred characterized as a very strong position.

Outlook 2nd half.

Revenues for the next half year are projected at 3.2 - 3.4 billion. This puts total annual revenues at or slightly below the $6 billion previously forecasted. Gross margin should continue at about 27%. Expenses should track downward. Apple is confident of its second half performance. Fred mentioned products recently released and "exciting new products to come" as a basis for optimism in a period of uncertainty in the marketplace.

In response to an analyst's question Fred indicated Apple has about 600 field reps pursuing the education market. He noted that Apple intends to "reinvigorate" its efforts in the education market, citing two new executives assigned to the effort, the acquisition of PowerSchool and an awareness of the need to "get back to basics."

Other tidbits. 28% of iMac buyers are new to the Mac platform. The Dalmatian and Flower iMacs accounted for 28% of total iMac sales. When asked to comment on the expressed intent of Intel to take a lower profit so as to increase total sales, Fred said Apple has a competitive advantage in comparison to Intel based machines. It doesn't pay 3% to M$ for the Windows operating system; it's not in the "commodity game."

Dana also reported that the web cast came through fine via Mac OS X's QuickTime 5 on an iBook 466 with 56K modem.