Apple's 2008 Q1 Financial Report--Best Quarter Ever Beat Analysts' Estimate Again and MacBook Air Orders 'Very Strong'

The consensus estimate of Apple's 2008 first quarter (Q1) earnings per share by financial analysts was $1.62 per share. Apple exceeded their number by nearly nine percent at $1.76 per share, not as large a percentage margin as has been customary. But Apple had a record quarter with a profit of $1.58 billion on revenues of $9.6 billion with a terrific gross margin of 34.7 per cent. Apple's cash balance rose to a whopping $18.4 billion.

"We're thrilled to report our best quarter ever, with the highest revenue and earnings in Apple's history," said Steve Jobs, Apple's CEO. "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."

Wow! I'll say. It's great to be seeing Apple's quarterly profit in excess of a billion dollars. Apple held a webcast conference call with financial analysts at 5pm ET--the replay is available from this Apple Web page.

Apple shipped over 2.3 million Macs, representing 44 percent unit growth and 47 percent revenue growth over the year-ago quarter, and sold over 22.1 million iPods during the quarter, representing five percent unit growth and 17 percent revenue growth over the year-ago quarter. Quarterly iPhone sales were 2,315,000 so Apple is well on the way to reaching its goal of selling 10 million during 2008.

When asked about the $100 iPhone rebate, Apple executives stated that it should have been mostly redeemed by now. I haven't redeemed mine yet. Nuts...I forgot about it when I bought Office:mac 2008 this past weekend so I'll probably use it on a MacBook Air.

Apple executives also said the number of iPhones bought but not activated is "significant."

Sales of portable Macs were surprisingly flat over last quarter but up 38 percent from last year. Desktops rose 20 percent over last quarter and 53 percent over last year due primarily to excellent sales of the aluminum iMac, according to Apple executives.

Will the MacBook Air make a difference in notebook sales? Apple executives claimed that pre-orders have been "very strong" and kidded one analyst who claimed to have ordered two saying that hopefully they had a good position in the queue. The MBA naysayers may join the ranks of the iPod naysayers. Hmmm...it could be a long wait once I have played with a MacBook Air and placed my order!

Apple executives also said they were very pleased with the pro audio and video market, especially in software sales.

On the retail store front, Apple executives said the number of Best Buy stores carrying Apple's products is 286 and headed toward 600. The number of new Apple retail stores will increase by up to 40 with some 25 of them being outside the U.S. by the end of 2008. Apple retail store sales continue to grow with revenue of $1.7 billion in Q1 of 2008, that's up 36 percent over last quarter and up 53 percent over last year. In fact 2008(Q1) revenue was up in every geograpical segment, both sequentially and over last year, including Japan.

Finally, Apple executives said the education market had a record Q1, both in K-12 and higher education. [Bill Fox]