Steve Jobs: Apple Will Be 'Fine'

Fourth-quarter revenues didn't quite hit the target, but with iPhone and Mac sales strong, Jobs is optimistic Apple can ride out a downturn

By Arik Hesseldahl

Steve Jobs may not be sure how much the economic slump will hurt Apple, but he's clear on this: It won't be as bad as pessimists predict. And for the first time in eight years, he got on an analyst conference call to discuss quarterly results to make sure the point wasn't lost on anyone.

"We may get buffeted by the waves a bit, but we'll be fine," Jobs said on the call, following the release of Apple's fiscal fourth-quarter results. Evidence of the buffeting may already be showing up. Apple (AAPL) reported $7.9 billion in sales, below the average estimate of analysts, which had come in at $8.05 billion. As for the fiscal first quarter, which includes the all-important holiday selling season, Apple forecast sales of $9 billion to $10 billion, more than $500 million less than analysts were expecting. Per-share earnings will come in at $1.06 to $1.35, at least 30¢ below the consensus estimate. CFO Peter Oppenheimer said the company was being "prudent" in light of the uncertain economy.

But in the immediate aftermath of the results, it was Jobs' comments about Apple being "fine" that carried most weight with investors. Apple shares, which had slumped more than 7% in regular trading, surged $12.84, or more than 14%, to 104.32 in extended trading after the results were released.

Reassuring Shareholders

There was plenty in the numbers and on the conference call to reassure shareholders who had seen the stock tank more than 40% this year. Fiscal fourth-quarter earnings were $1.26, a full 15¢ higher than analysts had predicted. And had Apple recorded sales of iPhones the same way it accounts for sales of Macs and iPods, per-share earnings would have been $2.69 on sales of $11.7 billion. "If this isn't stunning, I don't know what is," Jobs crowed. Under generally accepted accounting principles, Apple records sales of iPhones over the course of eight quarters.

Apple also outperformed rival Research In Motion (RIMM) in a key metric, Jobs took pains to point out on the call. Having released its second iPhone product, the iPhone 3G (BusinessWeek.com, 6/9/08) in July, Apple sold 6.9 million iPhones, besting the 6.1 million BlackBerrys that RIM sold during the quarter ended Aug. 30.