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Apple profits jump 54% on record sales of 4.9M Macs, 11.2M iPads - Page 3

post #81 of 129
10/18/11 at 3:36pm
Quote:
Originally Posted by Jcoz View Post

As I already siad in this thread, I'm still trying to let Apples estimates for Q1 sink in. That's what is still blowing my mind and I read it almost an hour ago.

Q1 is always the strongest of the year, so this needs to be compared YoY not sequentially. I haven't got a handle on those numbers myself. If you find them please post. If they really have guided confidently for next quarter it could mitigate some of the sour taste left over from this one.
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post #82 of 129
10/18/11 at 3:39pm
People should remember that the stock price's value takes into account all available information at the time. Leading up to the estimates, the stock was higher because people valued it that highly on certain assumptions regarding the coming earnings announcements. After the hard numbers come in, the stock price is revalued by the collective market based on the new information.

So its a disappointment in regards to expected performance compared to actual performance.

This isn't always connected to real world results. From a business standpoint, Apple is continuing to do insanely well, weathering the economy and continuing to grow at a break neck rate. So from a business/strategic outlook, Apple is not disappointing, nor is this signaling a downward spiral.

Put simply, Apple did incredibly well, just not as incredibly well as shareholders predicted.

In a way it makes sense; every quarter, analysts are continually conservative, and Apple blows them away. Continuing to shatter expectations is not sustainable; eventually, expectations will be adapted. This time, the pendulum swung top far, but it is approaching more of an equilibrium.
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post #83 of 129
10/18/11 at 3:40pm
Quote:
Originally Posted by Dr Millmoss View Post

Q1 is always the strongest of the year, so this needs to be compared YoY not sequentially. I haven't got a handle on those numbers myself. If you find them please post. If they really have guided confidently for next quarter it could mitigate some of the sour taste left over from this one.

I already did earlier, they projected a revenue of $37 Billion and EPS of more than $9 per share!
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post #84 of 129
10/18/11 at 3:51pm
Quote:
Originally Posted by Jcoz View Post

I already did earlier, they projected a revenue of $37 Billion and EPS of more than $9 per share!

No, sorry -- I meant last year's Q1, for purposes of comparison.
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post #85 of 129
10/18/11 at 3:55pm
Next quarter, when Apple announces record sales in every major category, and nearly $40 billion in revenue, all will be "forgiven."

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post #86 of 129
10/18/11 at 3:56pm
Quote:
Originally Posted by Dr Millmoss View Post

No, sorry -- I meant last year's Q1, for purposes of comparison.

$26 Billion IIRC.
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post #87 of 129
10/18/11 at 3:57pm
Quote:
Originally Posted by Dr Millmoss View Post

Apple seemed to be immune from the slow global growth over the past three years, always exceeding expectations (often by a lot).

That's a weird spin on global growth: Wall Street expectations based on whisper numbers based on a company's high double-digit increases in revenue and profits (which could come from a combination of market growth, market share growth, and cost-cutting) somehow provides a clue as to the impact on the bottom line from an economy that is growing in the low single-digits!?

A real stretch, I'd say.
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post #88 of 129
10/18/11 at 4:04pm
Quote:
Originally Posted by Jcoz View Post

Lol. I have long call's not stock. So it's a little different.

You're long (long-dated) call options, not the stock, and yet you think "it's a little different" in terms of the return on your position when the underlying asset price drops!?

Is it 'better' different or 'worse' different?
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post #89 of 129
10/18/11 at 4:07pm
Quote:
Originally Posted by Jcoz View Post

$26 Billion IIRC.

Okay, well that's still a conservative projection, amounting to less than the 54% growth we saw in this YoY quarter.

Quote:
Originally Posted by anantksundaram View Post

That's a weird spin on global growth: Wall Street expectations based on whisper numbers based on a company's high double-digit increases in revenue and profits (which could come from a combination of market growth, market share growth, and cost-cutting) somehow provides a clue as to the impact on the bottom line from an economy that is growing in the low single-digits!?

A real stretch, I'd say.

Spin or stretch? Make up your mind.

Seriously, if a company can grow their earnings by 50% or more in a year when the economy is growing maybe 5% then they've accomplished something major. Which, Apple certainly has -- for several years running. What that's got to do with whisper numbers or anything else you mentioned, I can't really tell.
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post #90 of 129
10/18/11 at 4:09pm
Quote:
Originally Posted by poke View Post

The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.

Yes, it's very impressive, but this was all fully anticipated months ago.
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post #91 of 129
10/18/11 at 4:13pm
On the up side...

I chose to listen to the earnings call, rather than follow the threads...


I was generally satisfied with the way they presented the results and the reasons for not meeting some expectations.


What really impressed me, though, was the way Tim Cook handled the barrage of questions directed at him.

In prior calls, Tim would field some of the questions, but most were handled by Peter Oppenheimer or Steve when he was present.


Tim got some pretty innocent sounding, difficult questions -- and was able to respond with very concise detailed answers. He appears to have an encyclopedic mind with total recall -- no fumbling around, Err... Ahh... nothing like that.

Tim had the answer he was able to reply immediately.

On the few occasions where strategy questions were asked -- Tim adroitly parried them.


It was an amazing performance -- but it was not an act.


Apple, its shareholders and customers are in good hands.
"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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"So at the end of the presentation, Steve came up to me and said: Is the iPhone worth criticizing? And I said: Make the screen five inches by eight inches, and you’ll rule the world."
– Alan Kay –
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post #92 of 129
10/18/11 at 4:14pm
Quote:
Originally Posted by Dr Millmoss View Post

Spin or stretch? Make up your mind.

Seriously, if a company can grow their earnings by 50% or more in a year when the economy is growing maybe 5% then they've accomplished something major. Which, Apple certainly has -- for several years running. What that's got to do with whisper numbers or anything else you mentioned, I can't really tell.

You should be able to tell: after all, you're the one that wrote: "....immune from the slow global growth over the past three years, always exceeding expectations."

Whose 'expectations' of exactly what were you referring to? What you wrote tells me that you're the one that conflated global growth and expectations.

'Spin or stretch?' One is a subset of the other. Take your pick.
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post #93 of 129
10/18/11 at 4:16pm
Quote:
Originally Posted by anantksundaram View Post

You're long (long-dated) call options, not the stock, and yet you think "it's a little different" in terms of the return on your position when the underlying asset price drops!?

Is it 'better' different or 'worse' different?

Its a little different in the context that was being used. He was stating that the stock price dips after earnings because people like me are selling. I said (essentially) that I own long calls, my selling them is different and does not directly affect the underlying equity price drop.

Of course my position sank by an order of manitude more than the stock did tonight, however I really didn't buy them to sell after Q4. I thought it was a possibility that I would sell them before or after, but the big fish was always next quarter's results.
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post #94 of 129
10/18/11 at 4:22pm
Quote:
Originally Posted by anantksundaram View Post

You should be able to tell: after all, you're the one that wrote: "....immune from the slow global growth over the past three years, always exceeding expectations."

Whose 'expectations' of exactly what were you referring to? What you wrote tells me that you're the one that conflated global growth and expectations.

'Spin or stretch?' One is a subset of the other. Take your pick.

So? I'm really not following this line of argument.

Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.
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post #95 of 129
10/18/11 at 4:24pm
Quote:
Originally Posted by anantksundaram View Post

Yes, it's very impressive, but this was all fully anticipated months ago.

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.
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post #96 of 129
10/18/11 at 4:28pm
Quote:
Originally Posted by Dr Millmoss View Post

So? I'm really not following this line of argument.

Apple has managed to plow through some powerful economic headwinds for several years running. Can they continue to do so? Is this earnings report a sign that they can't? That's the question I am asking. I don't pretend to know the answer.

You tell me: you're the one that confidently, unambiguously, in no-uncertain-terms, stated: "Ouch. The crappy global economy has finally reached Apple."

Now you say you really didn't know that ("I don't pretend to know the answer").

You're not following this.......?
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post #97 of 129
10/18/11 at 4:28pm
Quote:
Originally Posted by poke View Post

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.

Do they? I haven't heard talk like that about Apple from the tech media since circa 2003.

All companies can come up short, even the great ones. You've never any better than your last act.
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post #98 of 129
10/18/11 at 4:29pm
Quote:
Originally Posted by poke View Post

It's mind-blowing to me. Apple combines revenue greater than IBM with profits greater than Microsoft and yet the tech media talks about it like it's a fragile start-up that could screw up at any minute. People need to recalibrate.

I think people have!
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post #99 of 129
10/18/11 at 4:31pm
Quote:
Originally Posted by anantksundaram View Post

You tell me: you're the one that confidently, unambiguously, in no-uncertain-terms, stated: "Ouch. The crappy global economy has finally reached Apple."

Now you say you really didn't know that ("I don't pretend to know the answer").

You're not following this.......?

Groan. You really do make me groan out loud sometimes.

I already said that was my first reaction to the numbers. Feel free to discuss the actual subject.
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post #100 of 129
10/18/11 at 4:56pm
Quote:
Originally Posted by Dr Millmoss View Post

Do they? I haven't heard talk like that about Apple from the tech media since circa 2003.

All companies can come up short, even the great ones. You've never any better than your last act.

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.
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post #101 of 129
10/18/11 at 5:01pm
Quote:
Originally Posted by Dr Millmoss View Post

Groan. You really do make me groan out loud sometimes.

I already said that was my first reaction to the numbers. Feel free to discuss the actual subject.

Then go back and edit your first reaction. You can do that, you know. (Just returning the cheap sarcasm there).

What's the actual subject that you're discussing? That Apple missed EPS expectations? Did you miss what I said before?
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post #102 of 129
10/18/11 at 5:07pm
Quote:
Originally Posted by poke View Post

The real story: Apple is now a $100+ billion / year revenue company and its profits for the fiscal year that just ended ($26 billion) are in the top 20 of all time record annual profits by a company in the history of mankind. Apple is now in the realm of oil companies when it comes to profitability. They've left the tech industry far, far behind.

Exxon-Mobil is a pipsqueak in comparison.

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post #103 of 129
10/18/11 at 5:09pm
Quote:
Originally Posted by Dick Applebaum View Post

Apple, its shareholders and customers are in good hands.

Tim's clearly worth his salary and then some.

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post #104 of 129
10/18/11 at 5:10pm
Quote:
Originally Posted by poke View Post

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

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post #105 of 129
10/18/11 at 5:39pm
Quote:
Originally Posted by SpamSandwich View Post

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

This is a very good point. Especially given the fact that, arguably, this is the most competitive segment in which Apple operates (Macs, iPads, iPods, and OS are really pretty much segments of their own).
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post #106 of 129
10/18/11 at 5:50pm
I think there were two problems:

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.
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post #107 of 129
10/18/11 at 6:00pm
Winston Smith sat at his desk in the Records Department of the Ministry of Truth.
A rolled newspaper article appeared in the slot by his desk. He removed the paper from the hole and carefully unwrapped the article and gazed at the headline and accompaining text.

UPDATE 5-Apple blames iPhone rumors for disappointing results
Rare disappointment, shares dive
CFO blames rumors of new iPhone, customers wait

He thought for a moment and then crossed out the text with a thick black pencil again and again. He picked up the microphone and pressed the button on the machine and said in a slow precise tone.

"Apple profits jump 54% on record sales of 4.9M Macs, 11.2M iPads"
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post #108 of 129
10/18/11 at 6:02pm
Quote:
Originally Posted by GotWake View Post

I think there were two problems:

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.

Next time expectations will be lower, I presume, which will help reset expectations which will lead up to another blowout quarter.

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post #109 of 129
10/18/11 at 9:22pm
Quote:
Originally Posted by thataveragejoe View Post

love how the headline ignores the big miss (first in 4 years) in expected EPS and iPhone sales.

If I thought you actually were interested in investing in anything, I'd explain the differences between analysts' estimates and company guidance.

Go back to your mommy's basement, now.

BTW - after hours sales as the price dropped = 7+ million shares.
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post #110 of 129
10/18/11 at 9:29pm
Quote:
Originally Posted by anantksundaram View Post

Then go back and edit your first reaction. You can do that, you know. (Just returning the cheap sarcasm there).

What's the actual subject that you're discussing? That Apple missed EPS expectations? Did you miss what I said before?

No thanks. I take it you are amazed and shocked to discover that the markets are built on expectations. Perhaps you missed everything I've said about that.
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post #111 of 129
10/18/11 at 9:38pm
Quote:
Originally Posted by poke View Post

Have you been living a cave? The standard story is "can Apple survive new product x?" where x is the latest Android phone or tablet or the TouchPad or any of the other failed tablets, and it hasn't changed. Google is a gnat compared to Apple and gets the "unstoppable behemoth" treatment while Apple is still treated like it could implode at any minute if they make one wrong decision.

I really do live in cave. How did you guess? Fortunately I have electric lights and wifi.

I remember when what you say was true. I'm guessing you wouldn't claim it still is if you had those memories yourself. I hate to break it to you, but it might just be possible for other companies to compete with Apple.
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post #112 of 129
10/18/11 at 9:50pm
Quote:
Originally Posted by GotWake View Post

I think there were two problems:

Pushing the iPhone 4S from June/July to October. It killed sales, especially when many reports of a new form factor was posted on every news site at least once a month. Maybe it wasn't ready. But, the conference call made it sound like they waited for the new carriers for the launch.

Then we have the analysts. Yes, Apple always under-promises. Analysts for the most part usually low ball their numbers too. Then we have the amateurs handing the pros their a@@ for the last year or so. So, the pros have to get aggressive with their numbers, so they don't look stupid. Record iPad sales, record iPhone sales, record Mac sales, unfortunately, iPhone sales are a huge chunk of revenue, missing forecasts by just a little throws everything out of whack.

If Apple beat the yoy quarter by 475% and estimates had it at 500%, there would be disappointment. The market is irrational. Trying to understand it is an exercise in futility.

You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.

Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.
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post #113 of 129
10/18/11 at 11:10pm
Quote:
Originally Posted by Dr Millmoss View Post

You can't sugarcoat this no matter how much you try. It stinks.

Really what stinks here? IPad sales up 166%, Mac sales up or the general revenue improvements over last year. I really don't get the negativity.
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post #114 of 129
10/18/11 at 11:20pm
Quote:
Originally Posted by Dr Millmoss View Post

Yes, they are precisely that. If you can't even beat the conservative street consensus for earnings, then that is spelled B-A-D, and it doesn't matter if the company is Apple or GE or Intel or anybody else.

The street consensus you are so reliant upon is simply there for market manipulation. Real investors will look at these numbers and realize that Apple is the only technology company actually increasing sales. Name us one other computer company doing this well?
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post #115 of 129
10/18/11 at 11:36pm
Quote:
Originally Posted by jragosta View Post

You're missing one point. Apple's guidance was $25 M in revenues and $5 EPS. They told the Street that it would be a slow quarter. So they actually beat their revenue guidance by 10% and EPS by 40%. It's not their fault that analysts are idiots.

Furthermore, with Apple's track record, it's ridiculous to panic over one quarter - especially when Apple said it would be slow and had reasons for it. At that point, you're no longer an analyst or investor, you're a day trader.

Anybody look to analyst for investment advice shouldn't be allowed to buy stocks in the first place. Talk about being gullible in the presence of con men.
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post #116 of 129
10/18/11 at 11:40pm
You can't read too much in to one quarter's results, it's not a long enough time to even out the effect of special events. Maybe there were more Mac sales because people had been waiting for Lion, and fewer iPhone sales because people were waiting for the 4S?
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post #117 of 129
10/19/11 at 2:29am
Quote:
Originally Posted by jason98 View Post

It is going to get a lot uglier without Steve and more competitive iPhone nowhere near for around a year.

How is the 4S not competitive? Its got the same or better specs than the competition and fantastic operating software. Seems very competitive to me.

... at night.

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post #118 of 129
10/19/11 at 2:37am
Quote:
Originally Posted by SpamSandwich View Post

The one thing that makes me uncomfortable is the fact that 45% of their profitability is tied to one line of products, iPhone. That tight product mix enhances profitability, but demonstrates a high reliance on basically one product... it is risky.

Oracle puts all its faith into databases.
Microsoft puts all its faith into office.
Google puts all its faith into a search engine.

They seem to be doing quite alright with themselves.

... at night.

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post #119 of 129
10/19/11 at 8:43am
Quote:
Originally Posted by Dr Millmoss View Post

You are leaving out of your critique that the amateur analysts have been much closer to the mark in the past. They are the ones who overshot this time.

Your final statement is so obviously untrue I have to wonder why you have made it. Last quarter Apple beat the street by over 20% and the markets threw a party. That's how it works.

His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.

In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.

Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.
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post #120 of 129
10/19/11 at 8:47am
Quote:
Originally Posted by Pendergast View Post

His final statement is correct in that Apple did very well, just not as well as was expected by Wall Street.

In his example, Apple could increase revenue's 400%, but if Wall Street had expected them to increase it 500%, it's a disappointment. The share price was based on the expectations (inflated) and thus returns closer to where it should be based on the hard numbers released.

Perception is reality, and even though I'm not a fan of analysts, the fact is that the stock price was based on a combination of their expectations and Apple's guidance (plus other external factors and market conditions). If the analysts had been more conservative, the stock price likely would have been lower to start with.

This article is a great explanation:
http://tech.fortune.cnn.com/2011/10/...esnt-matter/

It turns out that Apple beat its guidance by roughly the same amount over every quarter for the past 2 years. The most recent quarter was not an exception. What happened is that the analysts were grossly out of line in their projections based on previous history.
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