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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: soup who wrote (25485)	7/14/1999 11:49:00 PM
From: Mark Palmberg	Respond to of 213186

From latest Wall Street Journal: The quarter provided continued evidence of a series of radical changes at the PC pioneer under Steve Jobs, who returned and regained control of the company two years ago. For example, Apple's prior management had struggled to make headway in the large corporate market for computers. Mr. Jobs, by contrast, has focused the company almost entirely on homes and in schools, which are less affected by pressures to standardize on software written for Microsoft's Windows operating system. I hope this kind of talk will finally dispel any of those ridiculous claims that Jobs' success is due largely to reforms begun by Amelio. Mark

To: soup who wrote (25485)	7/15/1999 12:22:00 AM
From: Richard Habib	Read Replies (3) \| Respond to of 213186

FWIW here are my notes from the cc. The financials can be found elsewhere. 905,000 units sold - 487,000 iMacsup from 350,000 last qtr. Both consumer and educational buying was strong. Education was up about 22% yr over yr. Marketshare numbers for the retail and mail order U.S. market for the 1st 2 months of the qtr were up to 11.5% according to PC Data. In the Japanese market, share of the desktop (I assume consumer) was 13.1% up from about 7% last year. Missed the some of the geographic marketshare but Japan was up 98% and Americas were up 28%. The revenue/unit sales gap was due to the rev being pressured from the slightly richer iMac mix and the lower ASP that caused. Margins were strengthened by lower component costs - RAM and processors. Overall demand was strong and prices across the products stable. Costs were up 8M to 323M as projected. Days sales outstanding at 52 days while days payable were 64 giving a -11 day cash conversion cycle. Ended the qtr were inventory less than 1 day. Channel inventory was flat with last qtr. Channel was 5 weeks at the end of the qtr. Forecast for the next qtr - rev and units up slightly. Margins flat. Costs flat. Taxes will remain 11-12%. Still comfortable with analysts .76. Did admit that rev guidance is down somewhat from guidance last qtr. Attributed decline in forecast rev growth to managing the channel inventory down in advance of product transition for the Dec qtr. Fred later came back and reiterated that they were very happy with the channel inventory they ended the qtr with. In Dec they expect strong seq and year over year unit and rev growth as all 4 product lines will be shipping in volume. Based on this he said 2H would be significantly up from both the 1H and 2H 98. I assume he means both in rev and units. Later he reiterated that strong meant strong double digit unit growth seq. When asked about the ISP committment/Free PC programs being seen in the industry Fred stated that it wasn't clear to Apple that their customers wanted that. Jim won't want to here this. When asked about their corporate market, Fred stated that was not a growth target. Did mention small and medium businesses. Servers are 1% of rev and that to grow modestly. When asked about margins going forward reiterated that the long term goal remains to maintain them above 25% but then stressed next qtr guidance remains flat with this qtrs 27.4%. Indicated a healthy PB backlog at the end of the qtr. Blue & Whites were down slightly per normal product life cycles. iMacs had the strongest sell thru since the introduction. Mentioned Sears was a very successful launch. Tax rate was about 11% with the 11-12% expected overall for 99. For 2000 overall 25%. Asked about their internet strategy all he would say is that they will have something to announce in the next 6 months. As regards the stock buyback there is no time limit attached. No new iMac buyer info yet. Soon. I imagine it will be announced as part of the keynote. He was asked how he could arrive at slightly up units in this next qtr if PB and B&W will be down slightly per normal product cycle. The analyst was trying to get him to admit P1 shipping. He refused but said iMac would be very slightly up. His avoidance of the P1 issue seemed to irritate the analysts. Also was asked if the 30 day from announcement to shipment was still valid. He basically ducked the question. That's it. Rich