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Apple Inc Q4 2009 Earnings Call Transcript
Author: 123jump.com Staff
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Last Update: 5:26 PM ET October 20 2009

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Apple Inc fourth quarter sales rose 25% to $9.87 billion and net income rose 46.5% to $1.67 billion or $1.82 a share.


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Yes, I can give you some highlights. If you look at the leads, Spain was extremely strong, which I know is going to be a surprise was over 40%. Germany was 40%. France was 39%, and so you had Western Europe less than U.K. extremely strong, a tremendous multiple from market growth. And even countries, Switzerland and Italy were in the mid-30s. And so, several European countries of sizable countries were incredibly strong.

Maynard Um - UBS

Great. And then just on the CapEx is about 4.7% of your sales and I am just trying to understand, I know you have the new stores in there, but aside from that, you talk about normal replacement of existing capital assets, manufacturing related equipment. Any more details you can provide on that piece of the CapEx that''s being spent on the capital assets and in particular what that is, and when that should start to decrease as a percentage of sales?

Peter Oppenheimer

Not sure I look at that as a percent of sales, but in fiscal ''09, our CapEx was about $1.150 billion up from about $1.1 billion last year. We spent a little under $400 million in both years on retail stores. As I look forward, we''re going to continue to confidently open retail stores and keep them fresh and exciting from a remodel perspective. The other parts of our business, we are spending capital on facilities, infrastructure and in the manufacturing spaces as well. But at 1.1 billion in the last two years, we''ve not been terribly capital intensive.

Maynard Um - UBS

Thank you.

Nancy Paxton

Thanks, Maynard. Could we have the next question, please?

Operator

From Deutsche Bank, we hear from Chris Whitmore.

Chris Whitmore - Deutsche Bank

Thanks. Couple of questions, first on the Mac business, looking forward to the December quarter, do you expect to hold Mac units roughly flat sequentially?

Tim Cook

The things that we''re considering -- we don''t give Mac-specific forecast, as you know, or product specific forecast, but the things I think you should consider, that we considered anyway in coming up with our numbers, the September quarter was benefited by a 50,000 units order from the state of Maine. This completed the 70,000-unit order the other 20,000 had shipped in our fiscal Q3.

It also benefited from an extremely strong back-to-school season and we had an extremely strong promotion wrapped around that, as you''re aware. We also had Snow Leopard and with every new OS, you have some pent up demand that ships with the operating system as people hold to get the latest software.

And finally, and I wouldn''t underestimate this, the demand for the portables that we announced in June was a key for the quarter at 35% growth and some of that was demand that was probably existed in June, but we were unable to fill. So, it got the quarter off to a very good start. So, those are the things that we thought about as we forecasted the Mac business.

Chris Whitmore - Deutsche Bank

Second question on iPhone supply, can you quantify the magnitude of the unit shortfall? In other words, what do you think you could have shipped, had you had adequate supply during the quarter?

Tim Cook
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