Quit your worrying. That seemed to be the message from Apple CEO-in-Waiting (AKA Chief Operating Officer) Tim Cook Wednesday. Cook tried to dispel talk that the tech giant’s gargantuan profits would be hurt as Japan-based suppliers recovered from last month’s devastating quake and tsunami.
Although acknowledging dozens of items used to build Apple products originate from Japan, Cook stressed Apple employees have “literally been working around the clock with our supplier partners in Japan and have been able to implement a number of contingency plans.”
Wall Street analysts reacted to Apple’s 83 percent year-over-year revenue growth with a mix of awe and relief. J.P. Morgan’s Mark Moskowitz late Wednesday described the revenue figure as a “magical growth story,” deriding observers who felt Apple’s profit margin could be reduced by supply chain concerns as “bogey investors.” Prior to the second quarter revenue statement, some worried Apple’s profit margin could fall to 36 percent. Instead, the tech giant reported a 41.4 percent profit margin.
Well-known Mac watcher Gene Munster, analyst with Piper Jaffray, declared Apple had a “monster” quarter. He said Cook’s statements about the effect of Japan on product supply removed a “key risk in the June quarter.” It will take until June for the iPad supply to equal demand, according to Munster.
[WSJ, AppleInsider]