Isn't Tyler Durden the character that Brad Pitt played in Fight Club? The same character that wanted to destroy every financial institution and have everyone's credits reset to zero?
Isn't Tyler Durden the character that Brad Pitt played in Fight Club? The same character that wanted to destroy every financial institution and have everyone's credits reset to zero?
Might've been. I don't care: that movie was off the hook, this one isn't even by the book.
What those armchair CEOs on Wall Street say is meaningless because in the grand scheme of things, it's cash flow that's going to keep your business in good shape, not a trophy signed by the Wall Street bigwigs. The first-place trophy isn't going to pay employees' salaries, fund R&D on the next product, or pay component suppliers. A business needs cash flow in order to to these things.
Market share doesn't automatically translate into strong profitability and cash-flow generating potential. The dot-com bubble proved that this model doesn't work. The list of companies that tried to chase market share at the expense of profits, hoping that they would be able to work on making more money after getting the dominant market position would fill several books. If you keep spending more than what you take in, you will eventually run out of money.
Isn't Tyler Durden the character that Brad Pitt played in Fight Club? The same character that wanted to destroy every financial institution and have everyone's credits reset to zero?
Samsung is kicking the crap out of Apple and Wall Street is happy Apple is finally getting beaten to the ground for charging insanely high prices for its products.
Samsung is kicking the crap out of Apple?
Let's see:
Samsung: (phones, tablets, computers, CPUs, screens, heavy industry, dozens of other products)
Revenues - $52.9 B
Net income - $6.6 B
Warns of slowdown for 2013
Apple: (phones, tablets, computers)
Revenues - $54.5 B
Net Income - $13.1 B
Forecast is for continued growth, albeit somewhat slower.
Yep. Samsung is really kicking the crap out of Apple. /s
What those armchair CEOs on Wall Street say is meaningless because in the grand scheme of things, it's cash flow that's going to keep your business in good shape, not a trophy signed by the Wall Street bigwigs.
And the figure that is often ignored is that Apple's cash flow increased by 33% last quarter.
However, Apple's earnings for the winter quarter of 2012, as Apple's executives have repeated called attention to before, both during and after last year's earnings, involved an extra, 14th week. This extra week is added to Apple's fourth calendar quarter (Apple's fiscal Q1) every five or six years.
Subsequently, as explained by Robert Paul Leitao in "The Mysterious Case of Apple's Missing Growth," this year's quarterly report effectively hid billions in new revenue relative to the previous year's quarter.
"On a weekly basis," Leitao wrote, "Apple's revenue was $4.2 billion in the recent December quarter versus $3.3 billion in the prior-year period. On an equal week basis, revenue in the quarter rose 26.7%."
The report added, "most observers look to the income statement to determine the company's growth. However, Apple's balance sheet that accompanied the December quarter revenue and earnings numbers tells a much different story. It's not so much that Apple's rates of growth have declined, it's an issue of discovering where the current rates of growth are reported."
More invisible billions within Apple
Leitao drew attention to Apple's sizable $132 billion cash pile, on top of the $2.5 billion distribution to shareholders and $2 billion allocated to the company's stock buyback plan.
But he also drew attention to other billions that aren't always considered by investors looking at Apple's operations. Apple continues to defer revenue for Mac and iOS devices it has sold in order to provide free software updates over the course of those products.
At the end of 2012, "Apple's deferred revenue balance totaled $7.274 billion," Leitao noted. "Most of this deferred revenue balance will be recognized as net sales over the next eight fiscal quarters."
Apple also declares US tax expenses on its cash holdings in advance, even though it doesn't have to pay those taxes until it chooses to bring those earnings into the US. "In the December quarter, Apple deferred $1.179 billion in income tax expense," resulting in a total of $14.712 billion in tax expenses that Apple has preallocated, but not actually paid.
"Should a sizable portion of these dollars be repatriated," Leitao stated, "it would not trigger additional tax expense. It would trigger the payment of taxes already recognized as tax expense in past quarterly periods."
He concluded, "The balance sheet will tell a different story than the quarterly income statements for the first half of the current fiscal year. As gross margin improves over the next few quarters and Apple aligns supply with continuing product demand, Apple's underlying rates of growth in FY2013 will become more clear."
1. Yes it's 14-week quarter last year, but the effect on net income should be small (a 1-2 out of 14 increase in net income is nothing major)
2. Reasons like cash, deferred tax etc etc, are irrelevant since those things happened last year too.
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
I don't know if they're 'naive' or not, but according to the WSJ article, $700M+..... an amount that would, as marginal trades, be more than sufficient to roil the daily market price in a stock such as AAPL.
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Haha, funny.
Reaganomics and Thatcherism (remember them, or are you too young to?) effectively emasculated the SEC in the USA and the UK with Deregulation ("You can't buck the Market" was their mindless mantra) and the rest of the gutless financial world, salivating uncontrollably, followed suit.
Chickens coming home to roost. AAPL is just one symptom of a cancerous global financial malaise.
I'm no financial guy by any stretch of the imagination but leading up to Apple's quarterly report there were numerous writings on this site and Macrumors that Apple was doing bad. Then we saw the stock fall. Next Apple reported the best goddamn quarter in their history and the stock still fell. WTF! Aple's earnings didn't degress it progressed so why the effing sell off? This whole things stinks. And since Apple reported the best quarter in its history, missing some a** clown's estimate by 2 million iPhones is ludacris. Somebody is going down!!!
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Haha, funny.
Reaganomics and Thatcherism (remember them, or are you too young to?) effectively emasculated the SEC in the USA and the UK with Deregulation ("You can't buck the Market" was their mindless mantra) and the rest of the gutless financial world, salivating uncontrollably, followed suit.
Chickens coming home to roost. AAPL is just one symptom of a cancerous global financial malaise.
Groan.
When you grow up, you'll understand the question better. Also, the antecedents of the 'global financial malaise' are so much more complicated than Reaganism/Thatcherism. For example, the repeal of Glass-Steagall, which Clinton championed; or the creation of a monetary union by eurocrats without creating a central bank with teeth or a common fiscal policy, etc.
1. Yes it's 14-week quarter last year, but the effect on net income should be small (a 1-2 out of 14 increase in net income is nothing major)
Flat profits over 14 weeks instead of 18 means that the stock actually went up almost 8%. That's a reasonable number - considering that the previous year's quarter was a record and the rest of the industry is reporting slowdowns.
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
I can't remember Oppenheimer's exact words but he said that r&d and infrastructure costs involved in bringing a plethora of new products to market helped to dampen margins and that Apple was committed to improve margins in the future.
I have to ask; does this mean that Apple does not intend to bring any new products to market for a while? I think that kills any idea that an Apple branded tv is coming to market. What about the costs involved in helping TSMC ramp up production of the 28nm chips?
I don't think I want Oppenheimer saying what he said. It sounds like that's the last of the big intros... but I really doubt that it is.
Was that just to placate investors?
Didn't we read another report that Apple is increasing spending in the infrastructure and r&d area?
First rule of investing. Never lose principal. Second rule is don't fall in love with a stock. First rule of fight club is don't talk about fight club (Tyler Durden).
I was a 5 year holder of apple stock. Sold not on the earnings release as I thought that was actually fine although the trend is starting to show rapid deceleration. That aside once I heard management state that no dividend boost or additional buyback was on the table I hit the sell button. Got out in the 475 range.
I believe, as does the street, that apple is never going to do anything with that money for shareholders. It burns 2% net after investment income each year to inflation. Apple is not a large acquisition machine and maybe should not be. When companies get this much cash they tend to overpay and burn through it in bad purchases. What they should do is give it to the owners but it has been made clear this won't happen.
The current 10B buyback over 3 years (about $3/share per year) goes to offset stock option grant dilution. Doesn't shrink the float. No benefit to shareholders. The buyback in context is meaningless. At this pace it would take 25 years to get you back to 700 if the stock stays flat.
Cook and the board are intent on the continued hoarding of the cash to save for a rainy day. They know in tech those days come and they may start burning that cash pile to stay in business. It will keep them in business for quite some time but the upshot is that shareholders aren't going to get it, period.
As such and for that reason only I sold. I only invest in companies who are very shareholder friendly. The tell for me should have been when they did no special dividend but even more so the refusal like half the S&P 500 companies to simply move Q1 dividend ahead so it was paid to shareholders before the end of 2012 to avoid tax hike. They could not even do this. Message received loud and clear Tim.
Money has been deployed to other stocks that will make back the 50% plus necessary that it will take now for apple to reach the old high. Less downside risk and way more upside in other companies now. Large numbers and competition do matter. I thought I'd get some breaks with simple market sentiment and expanding PE but that has no chance and the stock remains broken across the board.
Cook blew it completely. Let the stock go and decided to ignore it. Would have been fine if they had total blowout numbers but they didn't. He could have done a 50B to 100B buyback along with a 20/share dividend and a 10 for 1 split. When the stock cratered 20% he should have been all over that. He can only blame himself and the board now. This is the team to make great products maybe but not one that is financially savvy (money sits in bank forever losing to inflation) nor one that understands or even wants to play in the stock game.
Great companies with years of growth and 5 or 10 bagger potential ahead of them with little downside. Take a look around. I was in love with Apple stock for 5 years until the conference call. I realized as an owner of Apple I was not going to share in the spoils. That is reserved for the board and management only.
1. Yes it's 14-week quarter last year, but the effect on net income should be small (a 1-2 out of 14 increase in net income is nothing major)
2. Reasons like cash, deferred tax etc etc, are irrelevant since those things happened last year too.
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
I'm not sure why people seem to keep focusing on the last quarter and the numbers reported when the issue appears to revolve around next quarters guidance. 4-8% growth and margins of 37.5-38.5 all but guarantee an EPS drop from 12.30 to 10.50 or so. To put that in perspective revenue grew in the 2nd quarter by 83% and 60% in 2011 and 2012 respectively with correspondingly large moves up in EPS.
I think your 3rd point is very valid. Margins have fluctuated in the past, but lower margin products like the the mini and a lower priced phone, if rumors are true, would make that less likely going forward. That would be fine if revenues continued to increase at a good clip, but at 4-8% it would take 3 years to get back to 12.30.
I think your 3rd point is very valid. Margins have fluctuated in the past, but lower margin products like the the mini and a lower priced phone, if rumors are true, would make that less likely going forward. That would be fine if revenues continued to increase at a good clip, but at 4-8% it would take 3 years to get back to 12.30.
You're confusing profits and revenues. Revenues actually continued to increase at double digit rates.
I don't know if they're 'naive' or not, but according to the WSJ article, $700M+..... an amount that would, as marginal trades, be more than sufficient to roil the daily market price in a stock such as AAPL.
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Yeah, I would trust the SEC. They have such a great track record over the years. It wouldn't surprise me if they were in on it. Reminds me of Wil Ferrell's bit in "The Other Guys".
Comments
Might've been. I don't care: that movie was off the hook, this one isn't even by the book.
Are you being serious or sarcastic?
What those armchair CEOs on Wall Street say is meaningless because in the grand scheme of things, it's cash flow that's going to keep your business in good shape, not a trophy signed by the Wall Street bigwigs. The first-place trophy isn't going to pay employees' salaries, fund R&D on the next product, or pay component suppliers. A business needs cash flow in order to to these things.
Market share doesn't automatically translate into strong profitability and cash-flow generating potential. The dot-com bubble proved that this model doesn't work. The list of companies that tried to chase market share at the expense of profits, hoping that they would be able to work on making more money after getting the dominant market position would fill several books. If you keep spending more than what you take in, you will eventually run out of money.
That's the one.
Samsung is kicking the crap out of Apple?
Let's see:
Samsung: (phones, tablets, computers, CPUs, screens, heavy industry, dozens of other products)
Revenues - $52.9 B
Net income - $6.6 B
Warns of slowdown for 2013
Apple: (phones, tablets, computers)
Revenues - $54.5 B
Net Income - $13.1 B
Forecast is for continued growth, albeit somewhat slower.
Yep. Samsung is really kicking the crap out of Apple. /s
And the figure that is often ignored is that Apple's cash flow increased by 33% last quarter.
However, Apple's earnings for the winter quarter of 2012, as Apple's executives have repeated called attention to before, both during and after last year's earnings, involved an extra, 14th week. This extra week is added to Apple's fourth calendar quarter (Apple's fiscal Q1) every five or six years.
Subsequently, as explained by Robert Paul Leitao in "The Mysterious Case of Apple's Missing Growth," this year's quarterly report effectively hid billions in new revenue relative to the previous year's quarter.
"On a weekly basis," Leitao wrote, "Apple's revenue was $4.2 billion in the recent December quarter versus $3.3 billion in the prior-year period. On an equal week basis, revenue in the quarter rose 26.7%."
The report added, "most observers look to the income statement to determine the company's growth. However, Apple's balance sheet that accompanied the December quarter revenue and earnings numbers tells a much different story. It's not so much that Apple's rates of growth have declined, it's an issue of discovering where the current rates of growth are reported."
More invisible billions within Apple
Leitao drew attention to Apple's sizable $132 billion cash pile, on top of the $2.5 billion distribution to shareholders and $2 billion allocated to the company's stock buyback plan.
But he also drew attention to other billions that aren't always considered by investors looking at Apple's operations. Apple continues to defer revenue for Mac and iOS devices it has sold in order to provide free software updates over the course of those products.
At the end of 2012, "Apple's deferred revenue balance totaled $7.274 billion," Leitao noted. "Most of this deferred revenue balance will be recognized as net sales over the next eight fiscal quarters."
Apple also declares US tax expenses on its cash holdings in advance, even though it doesn't have to pay those taxes until it chooses to bring those earnings into the US. "In the December quarter, Apple deferred $1.179 billion in income tax expense," resulting in a total of $14.712 billion in tax expenses that Apple has preallocated, but not actually paid.
"Should a sizable portion of these dollars be repatriated," Leitao stated, "it would not trigger additional tax expense. It would trigger the payment of taxes already recognized as tax expense in past quarterly periods."
He concluded, "The balance sheet will tell a different story than the quarterly income statements for the first half of the current fiscal year. As gross margin improves over the next few quarters and Apple aligns supply with continuing product demand, Apple's underlying rates of growth in FY2013 will become more clear."
1. Yes it's 14-week quarter last year, but the effect on net income should be small (a 1-2 out of 14 increase in net income is nothing major)
2. Reasons like cash, deferred tax etc etc, are irrelevant since those things happened last year too.
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
Quote:
Originally Posted by anantksundaram
I don't know if they're 'naive' or not, but according to the WSJ article, $700M+..... an amount that would, as marginal trades, be more than sufficient to roil the daily market price in a stock such as AAPL.
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Is the SEC required to investigate if an individual investor lodges a complaint? Anyone know?
Haha, funny.
Reaganomics and Thatcherism (remember them, or are you too young to?) effectively emasculated the SEC in the USA and the UK with Deregulation ("You can't buck the Market" was their mindless mantra) and the rest of the gutless financial world, salivating uncontrollably, followed suit.
Chickens coming home to roost. AAPL is just one symptom of a cancerous global financial malaise.
Quote:
Originally Posted by anantksundaram
This is a very intriguing point....
I truly wish the SEC would look into this.
They already are looking into it. Sooner, rather than later you'll read about grand juries.
Aple's earnings didn't degress it progressed so why the effing sell off?
This whole things stinks.
And since Apple reported the best quarter in its history, missing some a** clown's estimate by 2 million iPhones is ludacris.
Somebody is going down!!!
Groan.
When you grow up, you'll understand the question better. Also, the antecedents of the 'global financial malaise' are so much more complicated than Reaganism/Thatcherism. For example, the repeal of Glass-Steagall, which Clinton championed; or the creation of a monetary union by eurocrats without creating a central bank with teeth or a common fiscal policy, etc.
Flat profits over 14 weeks instead of 18 means that the stock actually went up almost 8%. That's a reasonable number - considering that the previous year's quarter was a record and the rest of the industry is reporting slowdowns.
Everyone knows that there is no manipulation of the markets. It's all natural buy and sell¡
Quote:
Originally Posted by drobforever
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
I can't remember Oppenheimer's exact words but he said that r&d and infrastructure costs involved in bringing a plethora of new products to market helped to dampen margins and that Apple was committed to improve margins in the future.
I have to ask; does this mean that Apple does not intend to bring any new products to market for a while? I think that kills any idea that an Apple branded tv is coming to market. What about the costs involved in helping TSMC ramp up production of the 28nm chips?
I don't think I want Oppenheimer saying what he said. It sounds like that's the last of the big intros... but I really doubt that it is.
Was that just to placate investors?
Didn't we read another report that Apple is increasing spending in the infrastructure and r&d area?
First rule of investing. Never lose principal. Second rule is don't fall in love with a stock. First rule of fight club is don't talk about fight club (Tyler Durden).
I was a 5 year holder of apple stock. Sold not on the earnings release as I thought that was actually fine although the trend is starting to show rapid deceleration. That aside once I heard management state that no dividend boost or additional buyback was on the table I hit the sell button. Got out in the 475 range.
I believe, as does the street, that apple is never going to do anything with that money for shareholders. It burns 2% net after investment income each year to inflation. Apple is not a large acquisition machine and maybe should not be. When companies get this much cash they tend to overpay and burn through it in bad purchases. What they should do is give it to the owners but it has been made clear this won't happen.
The current 10B buyback over 3 years (about $3/share per year) goes to offset stock option grant dilution. Doesn't shrink the float. No benefit to shareholders. The buyback in context is meaningless. At this pace it would take 25 years to get you back to 700 if the stock stays flat.
Cook and the board are intent on the continued hoarding of the cash to save for a rainy day. They know in tech those days come and they may start burning that cash pile to stay in business. It will keep them in business for quite some time but the upshot is that shareholders aren't going to get it, period.
As such and for that reason only I sold. I only invest in companies who are very shareholder friendly. The tell for me should have been when they did no special dividend but even more so the refusal like half the S&P 500 companies to simply move Q1 dividend ahead so it was paid to shareholders before the end of 2012 to avoid tax hike. They could not even do this. Message received loud and clear Tim.
Money has been deployed to other stocks that will make back the 50% plus necessary that it will take now for apple to reach the old high. Less downside risk and way more upside in other companies now. Large numbers and competition do matter. I thought I'd get some breaks with simple market sentiment and expanding PE but that has no chance and the stock remains broken across the board.
Cook blew it completely. Let the stock go and decided to ignore it. Would have been fine if they had total blowout numbers but they didn't. He could have done a 50B to 100B buyback along with a 20/share dividend and a 10 for 1 split. When the stock cratered 20% he should have been all over that. He can only blame himself and the board now. This is the team to make great products maybe but not one that is financially savvy (money sits in bank forever losing to inflation) nor one that understands or even wants to play in the stock game.
Great companies with years of growth and 5 or 10 bagger potential ahead of them with little downside. Take a look around. I was in love with Apple stock for 5 years until the conference call. I realized as an owner of Apple I was not going to share in the spoils. That is reserved for the board and management only.
Quote:
Originally Posted by drobforever
1. Yes it's 14-week quarter last year, but the effect on net income should be small (a 1-2 out of 14 increase in net income is nothing major)
2. Reasons like cash, deferred tax etc etc, are irrelevant since those things happened last year too.
3. It claimed "when gross margin improves ..." but margin suppression has been the major concern. That guy gave no reason why gross margin would improve when people are shifting to buy lower margin products like iphone 4 and iPad mini.
I'm not sure why people seem to keep focusing on the last quarter and the numbers reported when the issue appears to revolve around next quarters guidance. 4-8% growth and margins of 37.5-38.5 all but guarantee an EPS drop from 12.30 to 10.50 or so. To put that in perspective revenue grew in the 2nd quarter by 83% and 60% in 2011 and 2012 respectively with correspondingly large moves up in EPS.
I think your 3rd point is very valid. Margins have fluctuated in the past, but lower margin products like the the mini and a lower priced phone, if rumors are true, would make that less likely going forward. That would be fine if revenues continued to increase at a good clip, but at 4-8% it would take 3 years to get back to 12.30.
Oh well, at least 2013 wont be dull.
deleted
deleted
You're confusing profits and revenues. Revenues actually continued to increase at double digit rates.
Quote:
Originally Posted by MacRulez
AI reported a rumor that Apple is moving some R&D activities from California to Shanghai:
http://appleinsider.com/articles/13/01/18/rumor-apple-to-open-shanghai-rd-center-this-summer
That works, but I was actually thinking about this report:
http://forums.appleinsider.com/t/155622/apple-to-spend-10-billion-on-innovation-expansion-in-2013
Yeah, I would trust the SEC. They have such a great track record over the years. It wouldn't surprise me if they were in on it. Reminds me of Wil Ferrell's bit in "The Other Guys".