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

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  • Reply 61 of 79
    tribalogicaltribalogical Posts: 1,181member

    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.

  • Reply 62 of 79
    tribalogicaltribalogical Posts: 1,181member

    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!

  • Reply 63 of 79
    tribalogicaltribalogical Posts: 1,181member

    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...

  • Reply 64 of 79
    tribalogicaltribalogical Posts: 1,181member

    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.

  • Reply 65 of 79
    tribalogicaltribalogical Posts: 1,181member

    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.

  • Reply 66 of 79
    tribalogicaltribalogical Posts: 1,181member

    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...

  • Reply 67 of 79
    tribalogicaltribalogical Posts: 1,181member


    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.

  • Reply 68 of 79
    SpamSandwichSpamSandwich Posts: 31,180member


    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.

  • Reply 69 of 79
    mstonemstone Posts: 11,510member

    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.

  • Reply 70 of 79
    tooltalktooltalk Posts: 766member

    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

  • Reply 71 of 79
    evilutionevilution Posts: 1,360member
    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.
  • Reply 72 of 79
    tallest skiltallest skil Posts: 43,399member


    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¡

  • Reply 73 of 79
    rogifanrogifan Posts: 10,669member
    evilution wrote: »
    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?
  • Reply 74 of 79
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by Rogifan View Post

    Reducing the ability of the iMac? What does that mean?


     


    "Blah blah thinner blah blah."

  • Reply 75 of 79
    MacProMacPro Posts: 18,292member
    solipsismx wrote: »
    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 ;)
  • Reply 76 of 79
    steven n.steven n. Posts: 1,120member
    mstone wrote: »
    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.
  • Reply 77 of 79
    gatorguygatorguy Posts: 20,696member


    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/

  • Reply 78 of 79
    tribalogicaltribalogical Posts: 1,181member

    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…!

  • Reply 79 of 79
    Ok
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