Fiscal Q1 Results a Nice Holiday Gift for Apple

As expected, Apple's Fiscal Q1 2009 (calendar Q4 2008) results showed great iPod numbers, but relatively weak iPhone numbers. This was expected and theories are that the iPod Touch is cannibalizing iPhone sales (rather than the expected reverse). Still, in light of the economy, it was a great quarter.

Apple stated it set a(nother) revenue record of $10.17 billion as well as a record net quarterly profit of $1.61 billion, or $1.78 per diluted share. A year ago, Apple had revenue of $9.6 billion and a net quarterly profit of $1.58 billion, or $1.76 per diluted share, in the year-ago quarter. Gross margin was 34.7 percent, same as a year ago.

Apple sold 2,524,000 Macs, 9% unit growth over a year ago, and a record 22,727,000 iPods a 3% unit growth over the year ago quarter. Quarterly iPhone units sold were 4,363,000, representing 88% unit growth over the year-ago quarter (for the original, more pricier, unsubsidized iPhone vs. the 3G model).

This equals 13.7 million iPhones during the calendar year, soundly beating the 10 million iPhones Apple had predicted for 2008 when it announced the iPhone in January 2007.

Interestingly, Apple added later in their conference call that the U.S. unit volume on iPods contracted by 3%, so all the growth in that area was due to international sales.

Cash is $28.1 billion, up from $24.5 billion at end of fiscal Q4 2008. Obviously someone wasn't investing much in mutual funds or stocks.

Here's the forward looking statement from their press release:

"Our outstanding results generated over $3.6 billion in cash during the quarter," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the second fiscal quarter of 2009, we expect revenue in the range of about $7.6 billion to $8 billion and we expect diluted earnings per share in the range of about $.90 to $1.00."

Analysts surveyed by Thomson Reuters had been looking for Apple to earn $1.13 per share on $8.2 billion in revenue. In this economy, what can you say, however?

Any bets on the first question? Yes, it was about Steve Jobs. And basically Apple answered in the same way: Jobs is still involved, there are plenty of great employees at Apple, yada, yada.

Apple continued to state that they do not want to play in the low-end voice phone business. That could mean disappointment to those who are hoping for or expecting a $99 iPhone. To be specific, their goal is not to lead unit sales, but to build the world's best phone. They've said this before.

The final question was about new smartphones, like Palm's Pre. Apple said they would go to great lengths to protect their intellectual property. That will possibly include multi-touch, which Palm showed on during their Pre unveiling.

A tough environment and economy is still there in Apple's way, but the stock is up $4.63 or nearly 6% at the time of this writing. For now, at least, investors are happy.