During earnings season it can be difficult sometimes to keep track of everything that is being said, as it is coming fast and furious. I decided to look over a few of the recent conference call transcripts to see what the technology companies and retailers with high consumer exposure are saying. Here are a few excerpts:
As we look at the quarter’s performance, we see our earnings were below our expectations yet our results appear to be better than others in our space.
The volatility associated with the amount of change to the company combined with the unfavorable macro-economic environment make it difficult to project our annual performance at this time. In light of this we are withdrawing annual guidance for the time being.
Retail revenue grew 4% year-over-year. However, overall revenue fell 8.6% due to declines in professional and direct.
It all sounds rather bleak, and the companies assure us they are going to do something about it.
So that’s my lens on the quarter and if I leave you with one point, it’s this; we’re never satisfied with missing earnings. However, we know it does not reflect the core health of our business, the strength of our strategy, or our ability to execute through our people, or our optimism about the future. In addition, we remain very focused on driving long-term success through building and strengthening our customer relationships.
Remember, at the same time we are structuring a more lean organization, we will be adding associates to Firedog, our multi-channel efforts, and to fund our new store openings and support growth in all of these areas. The end result is that we are positioned for our long-term strategy and profitable growth. Goals and commitments throughout the company are aligned to execute this strategy, and we have freed up capacity through simplifying our work, enabling us to focus on execution in the coming year.
To summarize, we’ve made good progress in the second quarter both in terms of financial performance and in executing our strategy. But we fully recognize that much more remains to be done.
In part there was also optimism about the future:
For many people, the consumer electronics industry is the industry most closely associated with how human beings live their lives now and in the future. The solutions we provide are right at the center of how people work, play and live. As a result, the industry has grown steadily and sometimes dramatically for years. In fact, going back to spring of 2001, the industry has seen positive growth every single quarter until the first quarter of this fiscal year.
Does this mean that people are changing their minds, turning away from technology and entertainment products and solutions? We don’t think so. They simply hit the pause button. We believe it’s a timing issue -- natural ebbs and flows of different aspects of our industry. Moreover, in the fourth quarter of last year, we may have fast-forwarded some of the business with terrific promotions.
But to be honest, we believe that what we are seeing also has a lot to do with macro economic factors like housing, interest rates, no relief at the price of gas, and in many other factors that give our customers cause for real concern right now. It’s a humbling reminder that no matter how tight a ship you run and no matter how confident you are of the course you are sailing, external conditions completely outside your control can still rock your boat.
Which sounds good, at first, until you remember that running a tight ship and being confident of the course being sailed has helped other companies avoid having their boats rocked by the external conditions outside their control.
Revenue of $5.41 billion was the highest in a June quarter in the history of Apple and represented 24% growth over the prior June quarter sales. The revenue was fueled by record-breaking Mac sales and continued strong demand for iPods.
Operating margin for the quarter was stronger than expected at 19.2%, resulting from higher than expected revenue and the continued, very favorable commodity cost environment. We generated net income of $818 million, which was up 73% over the prior June quarter's results, and translated to earnings per share of $0.92.