Apple: iPhone Continues to Ring Profits

Apple posted revenues of $9.6 bn and the net quarterly profit of $1.58 bn for the first quarter ended December 31, 2007. These results compare to revenues of $7.1 bn and net quarterly profits of $1 bn in the year-ago quarter. Gross margin was 34.7%, up from 31.2% in the year-ago quarter. International sales accounted for 45% of the quarters revenues.

Apple shipped 2,319,000 Macintosh computers, representing a 44% unit growth and a 47% revenue growth over the year-ago quarter. The company sold 22,121,000 iPods during the quarter, representing a 5% unit growth and a 17% revenue growth over the year-ago quarter. Quarterly iPhone sales stood at 2,315,000. Apple also launched Final Cut Express 4, a significant upgrade to its powerful video editing software and Aperture 2, a photo editing and management software with over 100 new features, which make it faster and easier to use.

In a management change, Andrea Jung, chairman and CEO of Avon Products, was elected to Apples board of directors. Andrea also serves on the board of directors of GE and is a member of the New York Presbyterian Hospital board of trustees and the Catalyst board of directors. The stock currently trades at $125.02.

Cisco: Moderate Sales and Profit Growth
Cisco posted encouraging results for the second quarter ended January 31, 2008. The company reported second quarter net sales of $9.8 bn compared to $8.4 bn during the corresponding quarter in 2007, a y-o-y growth of 16.5%, and net profits of $2.1 bn compared to $1.9 bn achieved during the second quarter of 2007, a y-o-y growth of 6.5%.

During the quarter, Cisco completed the acquisition of Navini Networks, a provider in the mobile WiMax broadband wireless industry, and the acquisition of Securent, a leading provider of policy management software for enterprises. Cisco plans to invest up to $1.59 bn on information and communications technology in the United Arab Emirates (UAE) over the next five years.

Recently, AT&T deployed the Cisco CRS-1 Carrier Routing System to support advanced residential and business services and TELUS became the first Canadian telecommunications provider to deploy and support Cisco TelePresence. Cisco and IBM have signed an agreement under which they plan to enhance retail banking experience, customer interaction, and collaboration across all types of delivery channels. The company was named a global strategic technology provider for the Middle East and North Africa (MENA) regions newly launched youth employment initiative, Silatech. The stock currently trades at $24.39.

DELL: Profits Move Downward
For Dell the fourth quarter ended February 1, 2008 saw net profits of $679 mn, down significantly from the same quarter in the previous year which stood at $726 mn, a negative growth of 6%. Total revenues rose about 10%, from $14.5-15.9 bn.

For FY 08, revenues for the whole year stood at $61.1 bn compared to $57.4 bn achieved in the previous year, a growth of 6%. Similarly, net profits stood at $2.9 bn compared to $2.6 bn in the previous year, a growth of 14%. For the fourth quarter, US sales were up 16% and accounted for 49% of the companys total revenues. Growth was especially strong in the BRIC (Brazil, Russia, India, and China) countries, where revenues grew 36% on a 50% increase in units. Growth was also strong in Asia Pacific and Japan, where revenues grew 28% and unit shipments were up 41%. Driven by new products, the company increased mobility revenues by 24% and unit shipments were up 37%. Services revenue was up 7%.

During the quarter, Dell entered into strategic sales partnerships with Best Buy in the US, Tesco and Dixons Stores (DSGi) based in the UK and Carrefour based in France. Dell added a second manufacturing facility in Europe, located in Ldz, Poland. On an acquisition spree during the quarter, Dell signed a definitive agreement to acquire MessageOne, a software-as-a-service (SaaS) enabled enterprise-class email business continuity, compliance, archiving and disaster recovery service for approximately $155 mn in cash. Similarly, Dell signed an agreement to acquire privately held Everdream, a leading provider of software-as-a-service (SaaS) solutions for remote-service management.

The company entered into a definitive agreement to acquire EqualLogic, a provider of storage area network (SAN) solutions. Recently, Dell has completed the acquisition of The Networked Storage Company (TNWSC), an IT consultancy company that specializes in transitioning IT data storage solutions. Dell completed the acquisition of ASAP Software, a leading software solutions and licensing services provider and a former subsidiary of Corporate Express for a purchase price of approximately $340 mn. The company has exercised its option to purchase CITs 30% interest in Dell Financial Services (DFS), making it the sole owner of the financial services company. The stock currently trades at $19.9.

Hewlett-Packard: Handsome Growth
HP performed moderately for the first quarter ended January 31, 2008. The companys revenues stood at $28.5 bn, up 13% y-o-y as compared to $25.1 bn in the corresponding quarter last year. The net profit was $2.1 bn, up 38% y-o-y for the quarter ended January 31, 2008 as compared to $1.5 bn achieved a year ago. Revenues from Americas grew 8% on a y-o-y basis to $11.2 bn. Revenues grew 15% in Europe, the Middle East and Africa to $12.3 bn and 22% in Asia Pacific to $4.9 bn.

During the quarter, personal systems group revenue grew 24% y-o-y to $10.8 bn. Imaging and printing group revenue grew 4% y-o-y to $7.3 bn. Enterprise storage and servers reported revenue of $4.8 bn, up 9% over the prior-year period fueled by ESS Blades, which grew 81%. HP Services revenue increased 11% y-o-y to $4.4 bn and HP Software revenue grew 11% over the year ago revenues to $666 mn. HP Financial Services reported revenues of $642 mn, an increase of 17% y-o-y.

HP estimates Q2 FY 08 revenues will be approximately $27.7-27.9 bn. The stock currently changes hands at $47.77.

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