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Apple reports earnings of $7.5B on sales of 33.8M iPhones, 14.1M iPads & 4.6M Macs - Page 2

post #41 of 96
So all the "experts" are wrong and Apple didn't really need a low cost iPhone.
post #42 of 96
Quote:
Originally Posted by mdriftmeyer View Post

Your title is wrong. It's not Apple reports earnings of $7.5 Billion, but reports Net Profits of $7.5 Billion.

Earnings = Profits = Net Income = Net Profits.

post #43 of 96
Quote:
Originally Posted by globalpix View Post

Great buying opportunity on Apple stock right now as idiots are dumping stock against very optimistic numbers.

 

Large investors and the trading firms don't care whether or not a company is profitable, they care if THEY can make a profit. A brokerage makes money both selling and buying! I wouldn't be concerned about short-term stock gyrations if you intend on holding AAPL for the long run.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #44 of 96
Quote:
Originally Posted by mdriftmeyer View Post

Your title is wrong. It's not Apple reports earnings of $7.5 Billion, but reports Net Profits of $7.5 Billion.

 

?  Earnings is perfectly acceptable to use here.  Apple reported $7.5 billion in net income, i.e. earnings.  The article is fine.

post #45 of 96
Quote:
Originally Posted by Rogifan View Post

So Apple beats estimates and yet they're down over 2% after hours supposedly because of lower margins. Yet I keep reading articles about how Apple needs cheaper iPhones and iPads. How exactly would that increase margins?

 

THANK YOU!! 

post #46 of 96
Quote:
Originally Posted by mdriftmeyer View Post
 

Wall Street guidance was less than what Apple produced. The drop I imagine is to take a loss now, rather than to take a bath later in Q1 2014 when Apple continues to crush the competition.

it's down because of the lower future gross margin guidance. present earning is far less important for a stock price when compared to projected future earnings.

post #47 of 96

How is Apple going to grow earnings going forward?  Volume growth through large market-share gains in China after the ChinaMobile deal, for starters.  The DoCoMo deal in Japan should also be accretive.  Also, EPS should start climbing from here anyway as the buyback program continues in earnest, and that will help to provide a pretty firm floor to the stock.  Combine those two factors and EPS will have a lot of support going forward.  

post #48 of 96
Quote:
Originally Posted by wizard69 View Post

You can have good margins on cheaper products. Go to the grocery store and look at the price of razor blades, lot and lots of margin in each package sold there.

The idea behind a cheaper product is to secure a larger share of the market.

Ok so show me all the companies producing cheap smartphones and tablets with high margins. I'd like to know who they are.
post #49 of 96
Quote:
Originally Posted by wizard69 View Post

You can have good margins on cheaper products. Go to the grocery store and look at the price of razor blades, lot and lots of margin in each package sold there.

The idea behind a cheaper product is to secure a larger share of the market.

Problem is no one has high margins in the cheap cell phone market. That's why Sammy and Apple are the only ones making money.
post #50 of 96
Quote:
Originally Posted by mrnohnaimers View Post
 

it's down because of the lower future gross margin guidance. present earning is far less important for a stock price when compared to projected future earnings.

This is exactly right. Thankfully someone else here understands rather than just complaining about Tim Cook or how investors are wrong about everything.

post #51 of 96
So Oppenhemer explains margins include $900M software deferral. Now the stock is up after hours as analysts adjust GM for that. LOL
post #52 of 96
Quote:
Originally Posted by Ravenas View Post

This is exactly right. Thankfully someone else here understands rather than just complaining about Tim Cook or how investors are wrong about everything.

AAPL is now up $6 after market.
post #53 of 96
Quote:
Originally Posted by Rogifan View Post


AAPL is now up $6 after market.

Future guidance was given to be less than expected and price dropped. That's very understandable. Some are concerned with future investment risk, while others see Apple beating sales estimates. Bulls vs. bears.

post #54 of 96
Actually, the after hours price is actually positive now ... I think the knee-jerk sell-off isn't going to net much gain for the "sell on the news" crowd this time. They may even have to buy back in for more than they what they sold.

These are solid numbers that are better than the figures that were already factored into the stocks price. The current product line-up is excellent (great iPads to propel Apple thru the Xmas quarter), and guidance is just fine. On top of that, we all know there are some completely new products to come next year.
post #55 of 96
Quote:
Originally Posted by Ravenas View Post
 

This is exactly right. Thankfully someone else here understands rather than just complaining about Tim Cook or how investors are wrong about everything.

 

I wonder how much a ChinaMobile deal next month would cushion against the bad effects of margin compression.  I imagine it would more than make up for it (by a long shot), but obviously, margin deterioration needs to be addressed sooner or later.

 

It appears that such a deal is more important than ever for earnings growth.  I'm sitting on pins and needles waiting for an announcement!

post #56 of 96
Quote:
Originally Posted by Rogifan View Post

So Oppenhemer explains margins include $900M software deferral. Now the stock is up after hours as analysts adjust GM for that. LOL

 

Oh wow, very interesting.  Ugh, this is why Tim Cook needs to brush up on his PR skills.  I feel like he leaves excuses in his bag, even when they're 100% legitimate and could help to prevent AAPL from getting punished in the market.  Then again, his tight-lipped demeanor probably helps with the implementation of the buyback at lower prices lol.

post #57 of 96
Apple is making its new iPads with very thin margins. iPad 1 through iPad 4 had wide margins. iPad mini came out with thin margins and the stock started tanking. Now iPad Air is coming out with tiny margins again. Apple, please make a huge iPhone with humongous margins so that Wall Street valuates AAPL based on the margins and we can get AAPL into the $700 range again. And we don't need a cook to be running the show - I know he likes apples and all, but let him run some other kitchen. Fruit cake!
post #58 of 96
Quote:
Originally Posted by CoreAndExplore View Post

Oh wow, very interesting.  Ugh, this is why Tim Cook needs to brush up on his PR skills.  I feel like he leaves excuses in his bag, even when they're 100% legitimate and could help to prevent AAPL from getting punished in the market.  Then again, his tight-lipped demeanor probably helps with the implementation of the buyback at lower prices lol.
I'll be happy if the stock is flat tomorrow. But clearly a knee jerk reaction as the stock went from $14 down to basically flat.
post #59 of 96
Quote:
Originally Posted by Rogifan View Post


Ok so show me all the companies producing cheap smartphones and tablets with high margins. I'd like to know who they are.

 

"Cheaper".

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post #60 of 96
Quote:
Originally Posted by island hermit View Post

"Cheaper".
Still waiting for names. Last time I checked HTC and Nokia are struggling to make profits and Motorola is a money pit for Google (though Wall Street doesn't seem to care). And LG just reported a not so great quarter in part to lackluster smartphone business. Perhaps Samsung has high margins on cheaper phones but I'm not aware of anyone else who does.
post #61 of 96

My worry is that this hit on the stock will cause Icahn to buy more shares, thus cause more problems for the company.

post #62 of 96
Quote:
Originally Posted by Rogifan View Post


Still waiting for names. Last time I checked HTC and Nokia are struggling to make profits and Motorola is a money pit for Google (though Wall Street doesn't seem to care). And LG just reported a not so great quarter in part to lackluster smartphone business. Perhaps Samsung has high margins on cheaper phones but I'm not aware of anyone else who does.

 

You keep saying "cheap", when in actual fact the other person said "cheaper".

 

There is a big difference.

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post #63 of 96
Quote:
Originally Posted by SpamSandwich View Post
 

 

Large investors and the trading firms don't care whether or not a company is profitable, they care if THEY can make a profit. A brokerage makes money both selling and buying! I wouldn't be concerned about short-term stock gyrations if you intend on holding AAPL for the long run.


Bingo!

Anyone using maths to justify this share price drop is naive or stupid.

post #64 of 96

You can focus on the "beats" all you want, but the bottom line is revenue is increasing at a very slow pace while earnings are down year over year.  Slow revenue growth, earnings falling or stagnant = a range bound stock price.  Typically the market does well from Nov through January so I would expect the share price to rise with the market, but I also expect it to fall more when the market corrects and continue that trend until a new product line is released or revenue finally starts to drop.

 

Covered calls from here to January should expire worthless or bought back at a profit.  

post #65 of 96
Quote:
Originally Posted by tkell31 View Post
 

You can focus on the "beats" all you want, but the bottom line is revenue is increasing at a very slow pace while earnings are down year over year.  Slow revenue growth, earnings falling or stagnant = a range bound stock price.  Typically the market does well from Nov through January so I would expect the share price to rise with the market, but I also expect it to fall more when the market corrects and continue that trend until a new product line is released or revenue finally starts to drop.

 

Covered calls from here to January should expire worthless or bought back at a profit.  

 

Last year's holiday quarter was great... but basically flat yoy... and the stock continued to tank throughout the year.

 

Until Apple shows some continued earnings growth I think we can expect AAPL to stay range bound.

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post #66 of 96
Quote:
Originally Posted by Tony Stark View Post
 

 

Yes because AAPL is a mature company and revs don't mean as much anymore and important is on margin and how much profit they can generate. AMZN on the other hand, is all about increasing revs right now. Over the next few years, AMZN is the much better investment stock market wise.


Okay, I'll play your ridiculous game...AAPL is a mature company?  Hmmmm, let me ask you: where has aapl's revenue come from over the last few years?  which product lines?  Are you sure it's a mature company?

 

Regardless, even if it were a "mature" company, where do you get the idea that it's more important to have margins?  You have it backward.  Mature companies have dominant market share (in a specific segment) resulting in steady (and usually slow) increasing revenue....has nothing to do with high margins.  You need to redefine what you mean by mature.

 

Listen, I get it...I get why the market is concerned with 1Q margins.  But it's just a fantasmic game the market loves to play to get price swings so they can make money in buying AND selling.

 

Ahhh, who am I tried to kid.  Just go on thinking it's because aapl is a mature company and amzn is a better investment.

post #67 of 96

That was a strong quarter.  The margin concerns were explained on the call. China Mobile is getting the iPhone in just a few days when it launches its 4g network.

 

imo Apple will finish the year around $600.

post #68 of 96
Quote:
Originally Posted by tkell31 View Post
 

You can focus on the "beats" all you want, but the bottom line is revenue is increasing at a very slow pace while earnings are down year over year.  Slow revenue growth, earnings falling or stagnant = a range bound stock price.  Typically the market does well from Nov through January so I would expect the share price to rise with the market, but I also expect it to fall more when the market corrects and continue that trend until a new product line is released or revenue finally starts to drop.

 

Covered calls from here to January should expire worthless or bought back at a profit.  

 

That was the last quarter with YoY margins over 40%. Starting in jan 2014, Apple will compare its YoY quarters with much lower margin quarters. The units sales increase and revenue will be significantly higher on a YoY basis with similar margins or even better margins.

 

EPS is going up on a YoY basis in Jan 2014 and beyond because in 2013 Apple margins were in the 36% to 37.5% range. From what was explained on the call, I think Apple margins in 2014 will be in the 37% to 39% range.

 

With 10% more revenue and 1% to 2% better margins, lower stock float on buybacks, I expect Apple to growth is EPS by 15% to 20% by the end of 2014.


Edited by herbapou - 10/28/13 at 4:33pm
post #69 of 96
Originally Posted by GrumpyCat View Post
So all the "experts" are wrong and Apple didn't really need a low cost iPhone.

 

Or a larger one.

Originally posted by Relic

...those little naked weirdos are going to get me investigated.
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Originally posted by Relic

...those little naked weirdos are going to get me investigated.
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post #70 of 96
Quote:
Originally Posted by Tallest Skil View Post
 

 

Or a larger one.

 

imo we will have a bigger iPhone in 2014. By the end of 2014, the 5C will become the low cost phone. They explained on the call that the current entry level phone was the 4s and the 5c is mid-range. Well the Analysts will have there low cost 5c, but in a year, not now. I suspect the margins on the 5c will be better than the current 4s, so Apple could price it at $400 instead of $450.

 

and, imo, 2014 will be year Apple gets into a new product category. Apple TV or iwatch or ...

other than that I expect an iPad Pro at some point and a bigger phone. 


Edited by herbapou - 10/28/13 at 4:12pm
post #71 of 96
Quote:
Originally Posted by sirozha View Post

. And we don't need a cook to be running the show - I know he likes apples and all, but let him run some other kitchen. Fruit cake!
Just go away.
post #72 of 96
Quote:
Originally Posted by Rogifan View Post

So Apple beats estimates and yet they're down over 2% after hours supposedly because of lower margins. Yet I keep reading articles about how Apple needs cheaper iPhones and iPads. How exactly would that increase margins?

 

Apple beat their current targets.  While margins were down, they were expected to be down *even more*-so even the margins were a 'plus' for the Apple column as valuation goes.

 

Profits were down, but that also was expected and also built into the current stock valuation.

 

Apple also released their forecast for the holiday season.  While it is a solid forecast, the current stock price was based on expectations that were higher than Apple forecast.  Since Apple's guidance is saying they are going to sell less over the holidays than Wall Street had valued into the share price, that is the driver for the (relatively small) correction to Apple's share price.

 

So it really isn't a case of Wall Street 'punishing' Apple, its a little bit the opposite.  Wall Street drove the shares higher than they should have been based on their best guess of what Apple sales might be.  Apple corrected them by stating the sales outlook looks good- just not as good as the stock price was on.

 

It is Apple's expected holiday sales forecast that drove the price down- not the reduced profits or lower margins.

post #73 of 96
Quote:
Originally Posted by herbapou View Post
 

 

That was the last quarter with YoY margins over 40%. Starting in jan 2014, Apple will compare its YoY quarters with much lower margin quarters. The units sales increase and revenue will be significantly higher on a YoY basis with similar margins or even better margins.

 

EPS is going up on a YoY basis in Jan 2014 and beyond because in 2013 Apple margins were in the 36% to 37.5% range. From what was explained on the call, I think Apple margins in 2014 will be in the 37% to 39% range.

 

With 20% more revenue and 1% to 2% better margins, lower stock float on buybacks, I expect Apple to growth is EPS by 20% to 30% by the end of 2014.

 

Hard to debate with wishful thinking.  I mean how can I reason with someone who thinks EPS could be $52 by this time next year and cites 20% revenue increases that the company hasn't seen in a year?  According to Cook they already retired 47 million shares which means they spent over 33% of the total allotment for buybacks already and EPS still dropped yoy.  Unless there is a new product line it's hard to see EPS doing better than a 10% increase (i.e. getting back to where it was a year ago).  That is a lot for a company this size, just not that exciting when it comes to the stock.  Great products, nice dividend, I just don't expect the stock price to go anywhere significant.

post #74 of 96
Quote:
Originally Posted by tkell31 View Post
 

 

Hard to debate with wishful thinking.  I mean how can I reason with someone who thinks EPS could be $52 by this time next year and cites 20% revenue increases that the company hasn't seen in a year?  According to Cook they already retired 47 million shares which means they spent over 33% of the total allotment for buybacks already and EPS still dropped yoy.  Unless there is a new product line it's hard to see EPS doing better than a 10% increase (i.e. getting back to where it was a year ago).  That is a lot for a company this size, just not that exciting when it comes to the stock.  Great products, nice dividend, I just don't expect the stock price to go anywhere significant.

 

You are right on one thing, I misread 2013 Q1 revenue and got the 2012 Q1 instead.  Still, in Q1 2014 we will have 10% on revenue with lets say the same YoY margins but a much lower stock float compare to Q1 2013. So that give us around 12-13% EPS in Q1 but I think it will get much better on a YoY basis toward the year because starting in Q2 2014 we should start to beat YoY margins. So we may close 2014 with 15% to 20% EPS increase.  

 

ok I will now go edit my previous post


Edited by herbapou - 10/28/13 at 4:39pm
post #75 of 96
Quote:
Originally Posted by herbapou View Post
 

 

You are right on one thing, I misread 2013 Q1 revenue and got the 2012 Q1 instead.  Still, in Q1 2014 we will have 10% on revenue with lets say the same YoY margins but a much lower stock float compare to Q1 2013. So that give us around 12-13% EPS in Q1 but I think it will get much better on a YoY basis toward the year because starting in Q2 2014 we should start to beat YoY margins. So we may close 2014 with 15% to 20% EPS increase.  

 

ok I will now go edit my previous post

 

Well, lets see what happens.  I don't think Apple is a bad investment at this point just not one to beat a market perform.  Certainly don't mind collecting the dividend every quarter.

post #76 of 96
Quote:
Originally Posted by NexusPhan View Post
 

 

They may have beat the estimates but the fact is that **profit** is down. Again. A year-over-year quarter decrease of $700 million is no joke. They need to do something to stop that decreasing **profit**. I'm surprised AAPL is only down 2%.

 

Edit: Fixed revenue to be profit. My apologies.

Here's a way to look at this from a different perspective and comparing to others.  I don't know why these guys are even looking at Gross margin more than Net Profit in terms of margins.  That's what the bottom line is.  Apple's margins on a Net Profit perspective is FAR better than ANY computer company out there, HP, Dell, ASUS, ACER, Samsung, etc. etc. etc.  That's what Apple is, a personal computing hardware company and that's how they are listed.   Actually, Samsung isn't technically listed as a personal computing company, but more of a technology company that branches out into other things like a component mfg, appliances, telecom, and other things COMPLETELY unrelated to computing.


Apple shouldn't be compared to Google, Microsoft, Oracle, IBM either from a perspective of the TYPE of business that they are.

 

In every line of business, there is how the company is doing as compared to other companies in the same sector and then compared to the sector as a whole.  I think people miss looking at companies from that perspective.  These analysts and media people keep comparing Apple's numbers to Google, Samsung, Micrsoft when they are actually completely different types of companies with traditionally different business models, cost structure, etc.

 

I would be looking and comparing Apple to the same sector as a whole and the to each "competitor" in the same sector to gauge how good or bad they are doing FIRST.  If you do that, they look like they are sitting on the top of the world in terms of profits and profit margins compared to everyone else combined or individually.

 

$7.9 Billion might be down a little, but that's not that far off from how much Google makes in Net Profits over the course of a year and this is done during the slow summer period right before some MASSIVE MAJOR announcements.  Yeah, the iPhone 5S and 5C helped, but they aren't shipping as many iPhone 5S's last quarter as they will in this quarter due to production issues that are just starting to get dealt with.

 

IPad sales were down because the new models didn't get announced and shipped.  The new MBPRetinas didn't get announced and shipped last month, same with MacPro and even iMacs barely got into last quarter's numbers.

 

Yeah, they are giving away OS X, iWork, etc. for free moving forward, but I think they'll make up for that with MacPro (new model) and new iPads and iPhones for this quarter.

post #77 of 96
Quote:
Originally Posted by island hermit View Post
 

 

You keep saying "cheap", when in actual fact the other person said "cheaper".

 

There is a big difference.

 

And we're still waiting for you (or others) to supply the name of a manufacturer that is making large margins on a cheaper phone than the iPhone.

"We're Apple. We don't wear suits. We don't even own suits."
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"We're Apple. We don't wear suits. We don't even own suits."
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post #78 of 96
Quote:
Originally Posted by sennen View Post
 

 

And we're still waiting for you (or others) to supply the name of a manufacturer that is making large margins on a cheaper phone than the iPhone.

 

... and I'm still waiting for you to comprehend what the original poster said.

 

[... even though razor blades is not a good example]

 

[... actually, upon rereading the original post I see that I must have combined it with another post concerning margins and volume. So... as "I" see it, Cook has chosen the devil he knows, higher margins. This is not to say that lowering margins wouldn't produce more eps, but it also does not guarantee it.)


Edited by island hermit - 10/28/13 at 6:08pm
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post #79 of 96
Unless Apple makes the iMac a POS like the pc people will hold on to it for dear life. Hell I had my flower power iMac from mid 2001 to 2008. Never a problem. Never a goddamn virus.
post #80 of 96
Quote:
Originally Posted by NexusPhan View Post

Sorry. I meant net profit. Should have been pretty easy to figure out what I meant considering it was in the title and first line of the article. And you've proven my point even more. Their revenue is up and net profit has decreased. Raise the red flags internally Apple.

All consumer companies have decreasing margins as they get bigger. B-to-B companies have much larger margins, but much smaller revenues. Distributors, like Amazon to consumers or Ingram to the trade, operate on tiny margins. Supermarkets are a 3% business, but they have huge cash flow.

Wall Street wants it all ways: They don't want Apple to retain so much cash, they want them to have less expensive products to gain (or stop losing) market share AND they want them to increase margins. You can't have it all. But I don't care...if the stock drops, I'll buy some more.

As I've posted many times before, it used to take a year for a consumer electronics company to sell a million units of anything. Now it takes Apple a few hours. And still Wall Street isn't satisfied. Even Macs sold well and no one expected that. With all the new products, even though only evolutionary, 4 th Q should be great.
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