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Apple beats on revenue but sees profits fall for first time in a decade - Page 2

post #41 of 80
Quote:
Originally Posted by Jetz View Post

 

What would the stock price be if they weren't upping the buy back?

 

Still.  5% is better than nothing.

 

 

Quote:
Originally Posted by RRtexasranger View Post

The dividend and the buyback is what's driving the stock up, not the revenue/EPS numbers which came in just about what Wall Street was expecting.
 

 

I don't think the spike is due to the promise of buy back or dividends. Reaction to that doesn't happen immediately. Instead, the spike is due to Apple basically hitting the analyst numbers.

post #42 of 80
Quote:
Originally Posted by drblank View Post

Yeah, I know.  Google did $10 Billion in Net Profit for the entire year last year and Apple only does that in one quarter. 

Again, please look at ALL the numbers. GOOG and AAPL have almost identical net profit margins of around 24%. Apple is a much larger company than Google.

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post #43 of 80
Quote:
Originally Posted by aaarrrgggh View Post


Sure, if you are ok with $8B next year, $6.5B the following year, and $5.5B the next it is fine. The concern is not what they did today, it is that it isn't as good as yesterday, and what it might look like tomorrow! For a stockholder, the implied PE of that kind of move is about a 4.0.

Their share repurchase plan sounds good; hopefully they already bought some 2014 calls and locked in the price before the announcement. Basically, the shares they are taking off the table reinforces the idea that they expect 15% declines in profits to be sustained for a while.

Guess I won't be retiring any time soon. Oh well.

 

Perhaps you should have diversified more.

 

Folk the past year folk have been screaming that Apple needs to lower prices and take a margin to increase market share. This is kind of what it will look like, and it will probably get worse as Apple forks out more cash for data centres, manufacturing equipment and processes, and the not inconsiderable cost of dumping Samsung.

post #44 of 80
Quote:
Originally Posted by tooltalk View Post

 

Samsung is really killing Apple..   According to Samsung's pre-earning guidance [1], Samsung's profit is up 50+% YOY or around $7+B for Q1 2013, narrowing the profit gap between the two companies.

 

Apple 2Q iPhone yoy shipment growth is record low. I'm guessing that Q3 iPhone shipment will be even worse since the 5S is expected to be out in Q4 of 2013. 

 

 

Quarters Unit Shipped QOQ YOY  
  270,000      
  1,119,000 314.44    
1Q2008 2,315,000 106.88    
  1,703,000 -26.44    
  717,000 -57.90 165.56  
  6,892,000 861.23 515.91  
1Q2009 4,363,000 -36.69 88.47  
  3,793,000 -13.06 122.72  
  5,208,000 37.31 626.36  
  7,367,000 41.46 6.89   iPhone 3S release (June)
1Q2010 8,737,000 18.60 100.25  
  8,750,000 0.15 130.69  
  8,400,000 -4.00 61.29  
  14,102,000 67.88 91.42   iPhone 4 release (June)
1Q2011 16,235,000 15.13 85.82  
  18,650,000 14.88 113.14  
  20,338,000 9.05 142.12  
  17,070,000 -16.07 21.05  
1Q2012 37,044,000 117.01 128.17   iPhone 4S release (Oct)
  35,064,000 -5.34 88.01  
  26,028,000 -25.77 27.98  
  26,910,000 3.39 57.64   iPhone 5 release (Sept Q4 2012)
1Q2013 47,789,000 77.59 29.01  
  37,400,000 -21.74 6.66  

 

 

 

[1] Samsung's pre-earning guidance, April 05, 2013, http://www.samsung.com/us/aboutsamsung/news/newsIrRead.do?news_ctgry=irpublicdisclosure&news_seq=20528

Samsung is not really comparable to Apple as a business model.  If you took out the actual portions of Samsung that are EXACTLY like Apple, you would have about 50% of the Revenue and Profits.  Apple doesn't make TVs, Appliances (refridgerators, cooktops, vacuum cleaners, washers/dryers, etc.),  cellular network equipment, component mfg, Insurance, shipbuilding, and a bunch of other things that Samsung does.  If you took out JUST the Samsung Mobile Division, Computing Division, Samsung is WAY below what Apple does in the exact same markets.  How much more would Apple do in revenues/profits, if they had an Appliance, TV division, and mfg components (panels, processors, memory chips, etc.) and sold to other customers?  

 

Anyone that tries to compare Apple and Samsung is kind of misleading what Samsung does vs what Apple does.  Unfortunately, Samsung isn't going to strip out each of the financials from each division so that we can compare only those divisions from Samsung that are IDENTICAL to Apple.

post #45 of 80
Quote:
Originally Posted by drblank View Post

Anyone that tries to compare Apple and Samsung is kind of misleading what Samsung does vs what Apple does. 

You mean exactly like you just did moments ago when comparing Google and Apple?

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post #46 of 80
Quote:
Originally Posted by philipm View Post

 

Is Doctor Who big in your part of the world? Time Travel does have its benefits. Unless you don’t like Daleks. But seriously, Samsung issues an estimate of numbers ahead of a quarterly report.

 

In any case, if Samsung is making less profit than Apple with a vastly bigger array of products (TVs, fridges, washing machines etc.) then I wouldn’t be using this to bash Apple.

 

Well, the point here is that Samsung's revenue/profit growth rate driven largely by their mobile devices sales is greater than Apple's. Take for instance Samsung's last quarter result, Samsung Mobile's (IM) profit grew from $2.5B in 4Q 2011 to $5.4B in 4Q 2012.  Samsung's least profitable divisions like CE (Consumer Electronics) has never been a major profit center -- and likewise its Q4 2012 profit was $0.74B.


Edited by tooltalk - 4/23/13 at 2:54pm
post #47 of 80
People will never be happy! Apparently Apple is judged against totally unrealistic expectations. Today
- they announced increased dividend - I hear it is highest in market
- the increased stock but back. Again, highest in history.
- Margin came done a little, but please show me other such a large company that does 35%+ of margin. This was because mainly due to lower margin Mini. And people all over blogosphere is asking for Apple to make more low priced iPhones.
post #48 of 80
Quote:
Originally Posted by mstone View Post

Again, please look at ALL the numbers. GOOG and AAPL have almost identical net profit margins of around 24%. Apple is a much larger company than Google.

Yeah,  Google doesn't really mfg anything.  They aren't in the same SEC sector as Apple.  Apple is actually considered a Personal Computing mfg and Google is more internet services.  Different Sector.  In addition, Apple has just shy of 1 Billion shares and Google has about 330 Million shares, so restructure all of the Google numbers and compare based on the same number of shares outstanding and Google doesn't look so good.  Google is also on a VERY slow growth rate. Apple has gone from a log growth rate, which obviously can't last forever and it's just slowing down since last year and that's part of the economy of what's going on in the industry.   Apple has also had product availability as an issue as it took Apple a while to get the iPhone 5, iPad mini, iMac product lines to ship to the demand levels.  Apple also didn't have any new product announcements last quarter, so that had a little impact.

 

I'm not worried for the long term of Apple.  I'm sure they will easily get at least a 20 to 35% growth rate per year, which suggests that the Stock will at least double within the next 2+ years, which is what some shareholders are looking at.

 

Apple is also going through their "getting away from Samsung" which will take at least a year or two to do the major share of that transition.  They are also investing a LOT of money in new panel and processor mfg with their business partners which sucks up cash.

 

In terms of which stock would I invest in?   From a standpoint of what the potential growth rate is over the next 2 to 3 years, what stock is over/undervalued and which do I have more confidence in?  I would pick Apple right now.  They not only are paying a decent dividend, which will increase, they are WAY undervalued trading at a P/E of less than 10, whereas Google is trading at a very high P/E ratio.   Google hasn't proven themselves at making much, if any, profit from hardware sales.  if anything, that's a lost leader for them.  Motorola lost $330 Mil last December quarter, so that hasn't panned out yet.  I'm not very confident in Google Chromebooks making much money, Google Glass seems like a waste of time and I don't much in the future for Goole making much money from hardware and software sales.  It's all pretty much ad revenues and some coming from services.   BFD.

post #49 of 80

So much for the spike.

post #50 of 80
Quote:
Originally Posted by stelligent View Post

So much for the spike.

it's hilarious, isn't it? lol

post #51 of 80
Quote:
Originally Posted by SolipsismX View Post


Revenues per Mac were $1,378, the highest since 2008, per Horace Deidu. I'd say that's because of the new iMac. I don't expect profit margins to grow with their PCs as this segment will likely continue to slide in a post-PC world.

I think the MacPro will improve their profit margins when they finally release it.  It's got a LOT of pent up demand, even though it's a niche product now.

 

New laptops?  Everyone that studies the industry are waiting for the new laptops, etc. because they know that Haswell processors are in the wings, plus the new 802.11ac spec should be finalized soon and that will CERTAINLY help the AirPlay technology with regards to audio and video quality due to increased bandwidth, etc.  

 

I don't know why the profit margins slipped other than they are going through the transition away from Samsung, having new panel technology which has to ramp up in terms of quality, etc. and that hurts margins until the components reach high yields.  I'm sure Apple's increased in R&D spending also hurts their overall Net Profit numbers as well.


I have to look at the numbers and listen to the entire conference call to make any additional specific comments about the stock, but I STILL think that Apple trading at a P/E of less than 10 is undervalued.  I would see that for the next few years, a P/E of around 12 is average and 15 or 16 is on the high side.  So, with all of that, Apple should EASILY be trading in the 500's right now to be valued closer to reality.

post #52 of 80
Quote:
Originally Posted by mstone View Post

You mean exactly like you just did moments ago when comparing Google and Apple?

I was being sarcastic.  Do you know what sarcasm is?  I was just putting Google in their place by explaining that Apple does in one quarter what Google did all year long.    Do i have to spell the word "sarcasm" when posting?  I thought it was obvious.

post #53 of 80
Quote:
Originally Posted by drblank View Post

Samsung is not really comparable to Apple as a business model.  If you took out the actual portions of Samsung that are EXACTLY like Apple, you would have about 50% of the Revenue and Profits.  Apple doesn't make TVs, Appliances (refridgerators, cooktops, vacuum cleaners, washers/dryers, etc.),  cellular network equipment, component mfg, Insurance, shipbuilding, and a bunch of other things that Samsung does.  If you took out JUST the Samsung Mobile Division, Computing Division, Samsung is WAY below what Apple does in the exact same markets.  How much more would Apple do in revenues/profits, if they had an Appliance, TV division, and mfg components (panels, processors, memory chips, etc.) and sold to other customers?  

 

Anyone that tries to compare Apple and Samsung is kind of misleading what Samsung does vs what Apple does.  Unfortunately, Samsung isn't going to strip out each of the financials from each division so that we can compare only those divisions from Samsung that are IDENTICAL to Apple.

 

Actually Samsung does break out some numbers. Mobile is about 48% of Samsung Electronics, so your 50% guess is damn close. What they don't break out is smartphone sales between their low-end and high-end phones. But it's easy to see a lot of them are low-end if you divide the sales by revenue and see what the average selling price is (about 1/2 of Apples average price for iPhones). But don't try to explain that to a hater - they don't like factual numbers when they can deal in FUD.

 

But what else would you expect from tool, who always tried to twist numbers around and then gets made a fool of over and over. He must be into S&M to explain his continuing to come here and post garbage all the time.

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post #54 of 80
Quote:
Originally Posted by drblank View Post

...

I'm not worried for the long term of Apple.  I'm sure they will easily get at least a 20 to 35% growth rate per year, which suggests that the Stock will at least double within the next 2+ years, which is what some shareholders are looking at.

 

Apple is also going through their "getting away from Samsung" which will take at least a year or two to do the major share of that transition.  They are also investing a LOT of money in new panel and processor mfg with their business partners which sucks up cash.

 

In terms of which stock would I invest in?   From a standpoint of what the potential growth rate is over the next 2 to 3 years, what stock is over/undervalued and which do I have more confidence in?  I would pick Apple right now.  They not only are paying a decent dividend, which will increase, they are WAY undervalued trading at a P/E of less than 10, whereas Google is trading at a very high P/E ratio.  ...

You are mixing up all kinds of different things. Firstly, I am not sure where you get 20-35% growth rate per year for the next 2-3 years? How does anyone know this? Secondly, although AAPL P/E is on the low side, the average P/E for Nasdaq is 17 which makes GOOG at 24 higher than average but I certainly wouldn't characterize that as a "Very High" P/E and thirdly Apple's cash does not factor into the earnings per share, profit, revenue, market cap or margin so that part of you rationalization is not part of the equation.

 

I'm not arguing that Apple isn't a great company, but perhaps we should just leave the comparisons out of the discussion as there are too many skewed arguments when someone is so emotionally wrapped up in a particular stock. 

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post #55 of 80
Quote:
Originally Posted by drblank View Post

Quote:
Originally Posted by mstone View Post

You mean exactly like you just did moments ago when comparing Google and Apple?

I was being sarcastic.  Do you know what sarcasm is?  I was just putting Google in their place by explaining that Apple does in one quarter what Google did all year long.    Do i have to spell the word "sarcasm" when posting?  I thought it was obvious.

Actually I think the word sarcasm might have a different meaning than what you think it means.

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post #56 of 80
Quote:
Originally Posted by drblank View Post

So, with all of that, Apple should EASILY be trading in the 500's right now to be valued closer to reality.

Yet Apple is guiding the revenue even lower for Q3 2013 to $33.5 billion, down $10 billion from Q2.

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post #57 of 80
Quote:
Originally Posted by AppleInsider View Post


The results for the three-month period ended March 30, 2013 compare to revenue of $39.2 billion and net profit of $11.6 billion, or $12.30 per diluted share, in the year-ago quarter. Gross margin was 37.5 percent, approximately 100 basis points lower than the 47.4 percent reported in the year-ago quarter, as consumers gravitated to more affordable, lower-margin products like the iPad mini.
 

A minor quibble perhaps, but "100 basis points" is another way of saying "one percent." I think you meant to say 10%, or "1,000 basis points" if you prefer.

post #58 of 80

Surprisingly some good convo going on here. The stock's basically flat now afterhours after a dip and jump as things get digested.

 

It basically breaks (through Wall St logic) like this:

 

The good: Dividend increase; thankfully don't have to hear about that anymore. beat earnings; in a barrage of rumors and negativity this was awesome. solid Chinese growth; WS always watching China...in line with rest of company

 

The Meh: Stock buyback; some called for it but little overall impact. "new product categories coming"; everyone says good stuff is coming...talk is talk, for now.

 

The not so good: Q3 forecast; important for stock direction and looks light in general. still no new product updates imminent; the drought goes on (for better or worse) and it means there's little to get 'excited' about from a stock perspective...also occurs when Apple's biggest competitor Samsung is rolling it's 'flagship' this Q.

 

One thing is for sure, the floor is definitely in on the stock. Probably sideways trading and drifting higher until we a get a launch of something or the overall market makes a big move one or the other. 

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post #59 of 80
Quote:
Originally Posted by aaarrrgggh View Post


Sure, if you are ok with $8B next year, $6.5B the following year, and $5.5B the next it is fine. The concern is not what they did today, it is that it isn't as good as yesterday, and what it might look like tomorrow! For a stockholder, the implied PE of that kind of move is about a 4.0.

Their share repurchase plan sounds good; hopefully they already bought some 2014 calls and locked in the price before the announcement. Basically, the shares they are taking off the table reinforces the idea that they expect 15% declines in profits to be sustained for a while.

Guess I won't be retiring any time soon. Oh well.

 

Speak for yourself. ;)

 

Who said anything about a "trend"? One quarter does not a profit exodus make (repeating myself from another thread)…  and besides, it's equally unrealistic to expect a company can sustain 47% margins indefinitely. I'm quite happy with them returning to a more sustainable 37% range, especially if it means less stock volatility down the road.

 

They guided lower for the next quarter, but I get a sense that the back half of the year is going to be pretty special. Long term there is nothing that points to diminishing profitability and revenue… on the contrary. Their revenues continue to increase (another record quarter), and there's no reason that won't also result in growing profit, even with these 'diminished' margins.

 

I don't see the 'unhealthy company' you describe or worry over. As for their P/E I still believe it should be above 12, for my own reasons, so I think there's a ton of upside to the stock from where we sit...

 

Up up and away...

post #60 of 80
Apple beat on revenue. Isn't that important? If people were buying less of their stuff revenues would be down no? And if they're getting more aggressive in certain markets with iPhone 4 shouldn't Wall Street be loving that since they're so obsessed with market share?
post #61 of 80
Quote:
Originally Posted by mstone View Post

After hours share price is down a tad .03% but holding up pretty well considering all the predictions of doom.

 

oops now it is up 4% so the street apparently likes the numbers.

oops! and then it's down again… a bit of profit taking perhaps.

post #62 of 80
Quote:
Originally Posted by aaarrrgggh View Post


Yeah... I was disappointed they didn't do any better on Mac units with stock available. The lack of recovering margins would seem to indicate they aren't controlling costs. I'll echo your "hopefully they have something big coming," because without it they are going to need to change a lot as a company.

 

First you say "they are becoming Microsoft" then you basically say, "do something big, or change (to Microsoft?)"...

 

I have been following your posts, most of them negative, and almost all of them essentially declaring Apple on the brink of a major sea change (or needing one). 

 

I can't really get a handle on what you expect or really want though… 

 

But you are easily disappointed, apparently.

post #63 of 80
Quote:
Originally Posted by Teamracer View Post

And most people thought that the analysts who predicted a fall in profits were idiots.

 

Erm, not exactly... We were mostly lambasting them regarding their "revenue predictions" (which appear to be mostly staged as stock manipulations these days). Most analysts projected they would miss their own guidance on REVENUE. Turns out they didn't. (And I still think most of the 'analysts' gracing AI articles are idiots, but that's another story.)

 

As for margins, most people I know expected the decline since their most robust products right now are lower margin items. From my view, 37.5% margins are still nothing to be unhappy about. I think that's a more sustainable margin, and way more than just 'adequate'. I'll accept the 'adjustment' and be happy with the revenue growth. Another record quarter!

post #64 of 80
Quote:
Originally Posted by Crowley View Post

http://www.apple.com/pr/library/2013/04/23Apple-Reports-Second-Quarter-Results.html

Am I reading it right that they expect all their metrics to decrease in the next quarter too? Revenue and margin? Again? That doesn't seem good.

 

It's also not all that bad. This isn't Apple 'declining in a vacuum'. Look at global economic projections and they're still way ahead of that curve. They'll still increase revenue and market share, and take 65 ~ 75% of all the profits in their space… Do remember they've gotten where they are during a deep and protracted global economic downturn. Can you imagine where they'll go once that turns around? That global recovery is already showing early signs of life.

 

I think it's great they're adjusting margins back into the realm of healthy, sustainable levels. The 47% range they hit this time last year was not that. It was a "bubble" in my view, and not sustainable over the long term in a global and competitive marketplace.

 

I want them to have room to adjust margins, while maintaining and growing revenue. Cash flow is king, and with some flexibility they can sustain real growth over the long term, even if margins decline now and then...

post #65 of 80
Quote:
Originally Posted by tooltalk View Post

 

Samsung is really killing Apple..   According to Samsung's pre-earning guidance [1], Samsung's profit is up 50+% YOY or around $7+B for Q1 2013, narrowing the profit gap between the two companies.

 

Apple 2Q iPhone yoy shipment growth is record low. I'm guessing that Q3 iPhone shipment will be even worse since the 5S is expected to be out in Q4 of 2013. 

 

 

Quarters Unit Shipped QOQ YOY  
  270,000      
  1,119,000 314.44    
1Q2008 2,315,000 106.88    
  1,703,000 -26.44    
  717,000 -57.90 165.56  
  6,892,000 861.23 515.91  
1Q2009 4,363,000 -36.69 88.47  
  3,793,000 -13.06 122.72  
  5,208,000 37.31 626.36  
  7,367,000 41.46 6.89   iPhone 3S release (June)
1Q2010 8,737,000 18.60 100.25  
  8,750,000 0.15 130.69  
  8,400,000 -4.00 61.29  
  14,102,000 67.88 91.42   iPhone 4 release (June)
1Q2011 16,235,000 15.13 85.82  
  18,650,000 14.88 113.14  
  20,338,000 9.05 142.12  
  17,070,000 -16.07 21.05  
1Q2012 37,044,000 117.01 128.17   iPhone 4S release (Oct)
  35,064,000 -5.34 88.01  
  26,028,000 -25.77 27.98  
  26,910,000 3.39 57.64   iPhone 5 release (Sept Q4 2012)
1Q2013 47,789,000 77.59 29.01  
  37,400,000 -21.74 6.66  

 

 

 

[1] Samsung's pre-earning guidance, April 05, 2013, http://www.samsung.com/us/aboutsamsung/news/newsIrRead.do?news_ctgry=irpublicdisclosure&news_seq=20528

 

 

If this was only their mobile phone division I'd be super impressed… However, it doesn't at all take into account the rest of Samsung's business divisions, like TVs, Home Appliances, etc… how much of their profit is related to Apple buying their chips, for example? As Apple increases, so does Samsung in that regard.

 

iPhone's year-on-year "shipment growth" is at a "record low"…? What are the real numbers there (citations, please)? If I understand what you're saying, it's, "They increased the number of iPhones shipped, but at a lower growth rate than … ever before."? Is that right? Again, real numbers please?

 

First, why is this important to us? And second, what part of Samsung's "dangerously increasing revenue" is gained from a market competing with Apple? We all know they're a strong competitor in the phone/tablet space, appealing to the low-end and mid-ranged buyer but, even selling more units overall they reap FAR lower revenues and profits.

 

Samsung is certainly NOT "killing Apple" in any case. Competing, yes, in great part by using Apple's own 'style' against them, at a cheaper price, but killing them? Nah… another record revenue quarter for Apple doesn't agree with that supposition at all, I'm afraid.


Edited by tribalogical - 4/23/13 at 5:41pm
post #66 of 80
Quote:
Originally Posted by PhilBoogie View Post


Ah, ok, I get your point. True, I also think they cannot possibly keep on creating products like the iPhone and iPad, but that could be due to my limited thinking from myself, where a group of people might 'dream up' new products because of the feedback they'd be getting from the group. Still, I do think the whole experience does indeed sell Apple products, especially after someone buys a product and then gets to understand that it works so seamlessly and in congruence with other hardware they make. The happy faces I see from people who have an iPhone and then experience an iPad (with all their Apps installed because they bought it for their iPhone as well) is simply, well, it simply is. < insert some positive English word here.

But that's more on hardware; you're touching on the iOS evolution is a different story, to which I disagree. I think it's the familiarity that keeps Apple customers faithful and returning ones. Change is good, but not for the sake of change. Apple indeed has the tendency to change, but I think it's usually for the better, not for the sake of change. People buying a new iPhone, iPod touch or iPad, upgrading the OS every year and still seeing the 'same old' 'interface/look/software/buttons/how it works' might just be the main selling point of Apples' touch devices.

 

 

I stick with Apple exactly because of their consistency (UI, product quality, etc.), the ease of use, stuff that 'just works', aesthetics and unrivaled support. Also for products that have an incredible build quality, long life and low overall cost of ownership. I don't own Apple products because they're 'cool' or always the "latest tech"… they still have to work well and fill a real need (even some that I didn't know I had until the device came along).

 

I'm close to buying my third-gen iPhone (original, then 3GS, and now… 4S, 5 or 5S?). I'm also close to replacing my first-gen iPad sooner because it no longer runs the latest iOS (v6), and I want those features (and the cameras) on my iPad.

 

I agree wholeheartedly that 'change is good but not for the sake of change', and that having a familiar, only incrementally changing iOS is a huge positive. I don't want a major learning curve with every iteration. It's hard enough with OSX … I just made the jump from Snow Leopard (10.6.x) to Mountain Lion (10.8.x) , and the adjustment has been significant. Not on my mobile devices please!!

 

I like that defaults are sometimes 'sandboxed' if it means more security and fewer problems… some people feel constrained by Apple's eco-system, I feel liberated by it because I'm free to focus on the things that I need to do and get done… to each their own I guess.

post #67 of 80
Quote:
Originally Posted by RRtexasranger View Post

The dividend and the buyback is what's driving the stock up, not the revenue/EPS numbers which came in just about what Wall Street was expecting.

 

Yeah, except if they came in even a tiny bit UNDER "just about what Wall Street was expecting" for revenue/eps, there'd be a panic sell-off and a 10% drop in price…..

 

So, NOW you're saying that 'beating the street' doesn't have any effect, it's all and only about the dividend and buyback? Psh…...

 

And anyway, that momentary gain has been stripped off by a bit of short-term profit taking. Let's see where the stock is sitting this time next week. Give the market time to think about this increase/decrease "push me/pull you" combination… it'll make more sense then. Maybe...

post #68 of 80

Quote:

Originally Posted by mstone View Post

Yet Apple is guiding the revenue even lower for Q3 2013 to $33.5 billion, down $10 billion from Q2.

 

Q2 -> Q3 isn't where you need to compare….. compare Q3 guidance to last year's Q3 results. That's what's significant.

 

Q3 is typically softer than Q2 unless there's a major product announcement/release. For awhile Apple was timing releases such that most quarters ended up more balanced (the holiday quarter always being the most robust in any case). But that isn't really sustainable for the long term, unless you're willing to push products out unfinished.

 

Anyway, here are the numbers you need to be comparing and talking about:

 

Q3 2012: Apple posted revenue of $35.0 billion and net quarterly profit of $8.8 billion, or $9.32 per diluted share. Gross margin was 42.8%.
 

Q3 2013 (guidance): revenue between $33.5 billion and $35.5 billion, gross margin between 36 percent and 37 percent (I'll let others do the math for profit/eps)...

 

So, projected revenue is about the same or slightly lower than last year's Q3 (flat or a slight decline) and margins 5~6% lower, but in line with the Q2 margin report of 37%, so perhaps they expect a similar mix of product sales?

 

I'm not at all disappointed with this guidance, as Q3 is always a bit lower than Q2, and considering the recent declines in global PC/technology sales and the state of the global economy… Apple remains way out ahead of those curves.

post #69 of 80

When Wall Street gets a burr in the saddle, nothing less than the destruction of all competitors would be good enough for Apple's stock.

 

Look at it this way, Apple has already transitioned the important part of their product development and engineering away from Samsung. How do I know this? Look at their latest phone. Minor improvements in their hardware, gimmicky updates to their software and no real innovation to be found. Why, you ask? Because they have lost their access to Apple's inner sanctum.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #70 of 80
Quote:
Originally Posted by tribalogical View Post

Quote:

Originally Posted by mstone View Post

Yet Apple is guiding the revenue even lower for Q3 2013 to $33.5 billion, down $10 billion from Q2.

 

Q2 -> Q3 isn't where you need to compare….. compare Q3 guidance to last year's Q3 results. That's what's significant.

 

Q3 is typically softer than Q2 unless there's a major product announcement/release. For awhile Apple was timing releases such that most quarters ended up more balanced (the holiday quarter always being the most robust in any case). But that isn't really sustainable for the long term, unless you're willing to push products out unfinished.

 

Anyway, here are the numbers you need to be comparing and talking about:

 

Q3 2012: Apple posted revenue of $35.0 billion and net quarterly profit of $8.8 billion, or $9.32 per diluted share. Gross margin was 42.8%.
 

Q3 2013 (guidance): revenue between $33.5 billion and $35.5 billion, gross margin between 36 percent and 37 percent (I'll let others do the math for profit/eps)...

 

So, projected revenue is about the same or slightly lower than last year's Q3 (flat or a slight decline) and margins 5~6% lower, but in line with the Q2 margin report of 37%, so perhaps they expect a similar mix of product sales?

 

I'm not at all disappointed with this guidance, as Q3 is always a bit lower than Q2, and considering the recent declines in global PC/technology sales and the state of the global economy… Apple remains way out ahead of those curves.

Good points. I still think the growth we experienced in the recent years is unsustainable but that is just the nature of the business when you cause a complete paradigm shift (although I hate that word)  like Apple did with the iPhone.

 

Which act is it now? The confrontation is has been presented...are we now in the conclusion? Perhaps, but we don't know how the third act will end.

Life is too short to drink bad coffee.

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Life is too short to drink bad coffee.

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post #71 of 80
Quote:
Originally Posted by tribalogical View Post

 

 

If this was only their mobile phone division I'd be super impressed… However, it doesn't at all take into account the rest of Samsung's business divisions, like TVs, Home Appliances, etc… how much of their profit is related to Apple buying their chips, for example? As Apple increases, so does Samsung in that regard.

 

iPhone's year-on-year "shipment growth" is at a "record low"…? What are the real numbers there (citations, please)? If I understand what you're saying, it's, "They increased the number of iPhones shipped, but at a lower growth rate than … ever before."? Is that right? Again, real numbers please?

 

First, why is this important to us? And second, what part of Samsung's "dangerously increasing revenue" is gained from a market competing with Apple? We all know they're a strong competitor in the phone/tablet space, appealing to the low-end and mid-ranged buyer but, even selling more units overall they reap FAR lower revenues and profits.

 

Samsung is certainly NOT "killing Apple" in any case. Competing, yes, in great part by using Apple's own 'style' against them, at a cheaper price, but killing them? Nah… another record revenue quarter for Apple doesn't agree with that supposition at all, I'm afraid.

 

 

Well, you should be impressed, considering that most of Samsung Electronic's profit now comes from Samsung Mobile -- the same is true for Apple; the lion share of Apple's sales also comes from their iPhone sales.  Samsung's CE and DP?  Not so much.

 

 

* Samsung Mobile's $5.4B profit in 4Q 2012 accounts for 62% of Samsung Electronic's profit.  And furthermore,

 

Quarters  IM Sales IM Profit Samsung total Sales Samsung total Profit IM share of total sales (%) IM share of total profit (%) IM chg sales (%) IM chg profit (%)
4Q 2010 11.75 1.48 41.48 3.01 0.28 0.49    
4Q 2011 17.18 2.56 47.30 5.30 0.36 0.48 0.46 0.73
4Q 2012 27.23 5.44 56.60 8.84 0.48 0.62 0.58 1.13

(IM = IT Mobile Communication) 

 

From what I recall, Apple's share of Samsung Electronic overall sales never exceeded 5%-6%.  Up until 2010, Sony was Samsung's #1 client with $12B in sales, while Apple's order was in $2B-$3B range.

 

I just quoted the iPhone shipment numbers from 2008 to 2Q 2013 with QOQ and YOY growth rate -- straight from Apple's quarterly reports. No? You want me to post it on your forehead? The  point here is that the iPhone growth is slowing down; not that absolute number of iPhones sold is going down. Why is it important?  because we care about Apple's future outlook.

 

Sure, you are free to parse out the data anyway you want.  Maybe Samsung is gaining at the expense of BRRY or NOK, but I've seen a lot of Samsung S3's past 6 months or so in NYC


Edited by tooltalk - 4/23/13 at 9:39pm
post #72 of 80
Lets just hope that this downturn is the kick up the ass that Apple needs. IMHO they have been cruising since iPhone 4.
Being derivative, releasing minor updates and reducing the ability of the iMac wasn't going to work for ever.
post #73 of 80
Originally Posted by Evilution View Post
IMHO they have been cruising since iPhone 4.

 

Yeah, those iPad updates and iPhone 5 sure constitute "cruising", much less any of the computers released in that time¡

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #74 of 80
Quote:
Originally Posted by Evilution View Post

Lets just hope that this downturn is the kick up the ass that Apple needs. IMHO they have been cruising since iPhone 4.
Being derivative, releasing minor updates and reducing the ability of the iMac wasn't going to work for ever.
Reducing the ability of the iMac? What does that mean?
post #75 of 80
Originally Posted by Rogifan View Post
Reducing the ability of the iMac? What does that mean?

 

"Blah blah thinner blah blah."

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #76 of 80
Quote:
Originally Posted by SolipsismX View Post

I wouldn't say it's big but it has a following, and one that has grown since the 2005 reboot. I'm personally a huge fan. In fact, I'm such a fan that despite not being a case user I have a TARDIS case for my iPhone 5, with an image of the inside for the Lock Screen, and ring/text tones of the TARDIS sound (which we found out from River Song is because the Doctor leaves the parking break on). I'd actually say I"m a bigger fan of Steven Moffat. Loved Coupling (not well known in the US), love Sherlock (well known), and love the episodes he writes for Who. I was very happy when he became the head writer for the series.

Off Topic but fun: Agreed, SM is a great writer. I recently started watching again thanks to streaming Netflix. Having watched the first few series (Ok decade) in black and white in UK it is fun to watch new ones in color. Interestingly I see now each episode is a self contained story (albeit connected and ongoing) rather than a whole season of cliff hangers. I have yet to see a Scamsung device in the future there 1wink.gif
Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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Enjoying the new Mac Pro ... it's smokin'
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini.
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post #77 of 80
Quote:
Originally Posted by mstone View Post

Good points. I still think the growth we experienced in the recent years is unsustainable but that is just the nature of the business when you cause a complete paradigm shift (although I hate that word)  like Apple did with the iPhone.

Which act is it now? The confrontation is has been presented...are we now in the conclusion? Perhaps, but we don't know how the third act will end.

I agree the past several years of 70% growth are not sustainable over the long term but 30% will be.
post #78 of 80

Felix Salmon with Reuters has a blog article that seems to make sense of how investors are looking at Apple now. (Thanks 9to5)

 

 

"Apple is trading at an astonishingly low valuation, with a p/e ratio in single digits, because it has now become that animal investors like least: a slow-growing tech stock. Either one is fine on its own, and both slow-growing stocks and fast-growing tech stocks can support much higher multiples than Apple is seeing right now. But conservative investors, who like slow-growing stocks with high dividends, are constitutionally uncomfortable with the volatility inherent in the tech world. And technology investors, who are happy taking that kind of risk, want to see substantial growth. Apple, notwithstanding the fact that it’s one of the most valuable companies in the world, is falling through the capital-markets cracks.

All of which perhaps explains the other part of today’s announcement: that Apple is going to start leveraging itself, and taking on debt. Apple’s debt will provide a safe low-yielding investment for conservative investors"

http://blogs.reuters.com/felix-salmon/2013/04/23/apples-new-pitch-to-investors/

melior diabolus quem scies
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melior diabolus quem scies
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post #79 of 80
Quote:
Originally Posted by Steven N. View Post


I agree the past several years of 70% growth are not sustainable over the long term but 30% will be.

 

And even sustained 30% growth should put the stock into 15+ P/E territory at the least… not to mention the fundamentals that represents. 

 

Apple's first foray into $700 territory was just that, a 'first foray'… add in wearable computing, the 'we cracked it' TV, iPhone and iPad X (will they still have screens then?), massively powerful desktops and laptops (moore's law applied 10 years out), and the future is bright...

 

One small detail seeming to be missing from the recent radar: Apple's fairly high-profile moves into the automotive space with "Siri Hands Free" and other more fully integrated systems… I could see them leveraging that into a much greater presence and role over the next few years. Something to look forward to…!

post #80 of 80
Ok
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