You're not getting it. It is an incremental movement when considered q to q but it a move downward when looked at yoy. What is supposed to be Apple's best quarter and, for all intent and purpose, the quarter where you would expect margins to be sustained from the last q. When you say that +.9 balances out -.7... are you kidding? Really? Start adding up the difference between earnings from each quarter and then you will find out that the two don't even come close to cancelling each other out.
You've proved my point by saying that 40% or greater margins are not sustainable. Exactly what Wall Street is hearing.
So, next year, let's say it drops another .7%... even if the q to q is up .9%... then what happens.
I don't know what I'm not "getting", man. YoY vs QoQ? Increment vs trend? I'm suggesting the major correction happened over a year ago, and since then we're seeing an improving "trend" comparing margins to revenue. Reflected in the past couple of quarters especially... a stabilizing of margins (I see it, and you say I need glasses. Are you even looking at what I'm referring to?). I don't believe we will see a further significant erosion of margins (the kind that matter to the bottom line or long-term health of the company). The supposition of a further YoY decrease of fractional margins (which don't really matter unless they continue long term) is correct, but I don't see that as an ongoing trend.
And I'm not sure what your point is/was to be honest (what I supposedly proved for you?)... a year ago, I was discussing what I saw as a pretty substantial "correction" to their (even then) unrealistic margins. You couldn't sustain those high margins long term and maintain competition, etc. When they adjusted from >40% to high 30s (running roughly between 37 and 38 pretty consistently since) they actually improved their flexibility, ability to adjust to conditions and competition, etc. So, we agree in principal about the >40% margins not being sustainable... but that's REALLY old news!
I don't think growing the margins again from where they are now is actually healthy or desirable. They even have some room to decrease them in a positive way (because not all margin reductions are bad things). I'd probably be happiest if they could ride between 35 and 37. That to me is very sustainable, allows for solid revenue / net profit growth (in real terms, not percentages) while remaining competitive and flexible.
Saying Wall Street is all about the margins is in a small way shifting that "need for growth" philosophy into margins, where there is an inherent ceiling. That shouldn't be the criteria at all. And building on a perception of "shrinking margins" is not accurate if you're implying that they're falling dangerously, or anywhere near distressed levels.
Meanwhile there isn't any measurable or foreseeable ceiling to Apple's revenue growth. The stuff that really matters. Stay in the mid to high 30s for margins, and keep growing revenue. That's a healthy picture. The margin correction in late 2012 was a necessary one. Now we're cruising in high-gain mode. I see margins stabilizing. Why do you see a different picture?
Now I wonder if it's you that doesn't get what I'm trying to say here?
What I'd truly like to see as a shareholder is Apple scrapping the 2% dividend, not initiating any more buy-backs, grow their cash, and wait for a $ repatriation holiday from the gov't....and then 6 years down the road buy back over half their shares on the open market in one fell swoop and watch their stock soar past $1200 The 2% dividend is not doing the stock price any favors....it's hurting it.
He's been heading Apple on and off for over 5 years. At what POINT do you finally give the guy some due??
He clearly isn't doing a bad job. Old saw or no, Apple is has grown huge and is growing huger by leaps and bounds under his leadership.
I may not like his style as much as Jobs', but I can't fault the job he's doing. The team is awesome. The leaps forward last year alone were fantastic, as well as foundation building steps.
What I can do with my iPhone, iPad, MacBook Air and iMac together (due to how iOS, OSX and iCloud work together, not to mention app interoperability) is pretty groundbreaking stuff. Most of that has come together in just the past 12 to 18 months.
I'm sure Jobs had a hand in that. These things didn't happen overnight. But SJ has been gone for over 3 years. His legacy and inspiration remains. And the team today is rocking it WAY better than Sculley and his crew ever did.
I never had much faith in John Sculley. Had serious doubts from day one. He proved my misgivings right. I have the opposite view regarding this team.
I'm surprised you feel any differently having the comparisons at hand.
Pause and reflect on something. 77 MILLION iOS devices (not counting iPods) last quarter alone.
Immensely profitable quarter.
No end in sight for that momentum.
At what point do you finally put aside the cynicism, and just say "wow"....?
Too much people here miss S. Jobs. I do too, but I think T. Cook doing a great job at Apple. And "yes", he probably don't have the vision of Jobs, but who can pretend to have it? To compensate, they seem to work more as a team. And I admire Cook for this reason: not trying to be S. Jobs!
Should these quartely results had been obtained under S. Jobs, everyone would had been happy
So everyone says Apple is DOOMED but yet still come up with unrealistic targets and then when Apple doesn't meet them punishes the stock. And punishes the stock even though numbers outside of North America were up pretty much across the board. When Apple does well in North America it gets downplayed. This quarter they did really well overseas and the focus is on North America. No matter what Apple does it can't win.
And you know the current team doesn't have the vision? I suppose they could release some half baked thing ala Galaxy gear just to prove they're innovating but I'd rather have them release things when they're ready, not just to scratch wall streets itch.
Again... WTF are you talking about?
Do you just respond without reading the other person's post.
So everyone says Apple is DOOMED but yet still come up with unrealistic targets and then when Apple doesn't meet them punishes the stock. And punishes the stock even though numbers outside of North America were up pretty much across the board. When Apple does well in North America it gets downplayed. This quarter they did really well overseas and the focus is on North America. No matter what Apple does it can't win.
Give your head a shake. Why do yo give a sh*t what Wall Street thinks. Damnit man. Apple is healthy. That's all that matters. For that, Apple is winner all the way.
Now let's hope that Cook isn't just good at spitting out products but that he can choose another category winner that will continue Apples stellar growth.
He's been heading Apple on and off for over 5 years. At what POINT do you finally give the guy some due??
He clearly isn't doing a bad job. Old saw or no, Apple is has grown huge and is growing huger by leaps and bounds under his leadership.
I may not like his style as much as Jobs', but I can't fault the job he's doing. The team is awesome. The leaps forward last year alone were fantastic, as well as foundation building steps.
What I can do with my iPhone, iPad, MacBook Air and iMac together (due to how iOS, OSX and iCloud work together, not to mention app interoperability) is pretty groundbreaking stuff. Most of that has come together in just the past 12 to 18 months.
I'm sure Jobs had a hand in that. These things didn't happen overnight. But SJ has been gone for over 3 years. His legacy and inspiration remains. And the team today is rocking it WAY better than Sculley and his crew ever did.
I never had much faith in John Sculley. Had serious doubts from day one. He proved my misgivings right. I have the opposite view regarding this team.
I'm surprised you feel any differently having the comparisons at hand.
Pause and reflect on something. 77 MILLION iOS devices (not counting iPods) last quarter alone.
Immensely profitable quarter.
No end in sight for that momentum.
At what point do you finally put aside the cynicism, and just say "wow"....?
WTF are you talking about?
We're talking about Wall Street's view of Apple. Not mine. I'm giving you the reasons as to why Wall Street is reacting the way it does. At least that was where this started. You can go off on any tangent you want... but it has nothing to do with me.
Apple break all the records of all known companies except the oil explorers. Yet wall street is not happy! Well go and watch the movie "assault on wall street" and you will understand what the traders are really made of. In real world - these are real proof: JPMorgan and all the others just recently paid penalties for their trading "expertise", and the traders value Googles future promised earnings forgetting past 12.5 billion $ purchase of Motorola. That's the picture of the wall street guys. So do not be surprised if they say Apple is doomed!
What I'd truly like to see as a shareholder is Apple scrapping the 2% dividend, not initiating any more buy-backs, grow their cash, and wait for a $ repatriation holiday from the gov't....and then 6 years down the road buy back over half their shares on the open market in one fell swoop and watch their stock soar past $1200 The 2% dividend is not doing the stock price any favors....it's hurting it.
That doesn't make any sense. Apple would need to amass the non-cash value of the company in cash in order to buy back half of the shares, and if they were to do that, they've just frittered away all of their money on shares and the company's net worth is slashed by 50%. The stock would see a small spike because of the volume of trading, but would go back down soon after.
Less shareholders, but no long term value created; a complete waste of time, effort and money.
Stock buy backs are only a good investment for shareholders if the
company is likely to be valued more in the future than it is today.
We're talking about Wall Street's view of Apple. Not mine. I'm giving you the reasons as to why Wall Street is reacting the way it does. At least that was where this started. You can go off on any tangent you want... but it has nothing to do with me.
F*ck me!
I was replying to two entirely different threads. The wall street view is a different one. This was about:
Tallest: The decade and a half [[Tim Cook has been]] at Apple thereafter has already disproven it.
You: ... as a supply chain guy... sure.
Then my response. Where is the "wall street perspective" in that exchange? Sorry, you lost me. This here wasn't anything to do with the discussion of margins we've been carrying on....
So, in this thread, I asked what it would take for you to see TC as more than just "the supply chain guy"... you've been expressing doubt comparing him to John Sculley.... or did I misunderstand something there?
Apple had an outstanding quarter, but they left money on the table in my opinion. Case in point. Instead of a larger handset, which some user prefer, they went with a multi-colored version of last year's iPhone. Had they actually listened to the market Apple could have easily shipped 55+ handsets. That's my $.02...
Since 2004, really. He took over during the first cancer bout.
October 2011.
That’s grounds for dismissal, that is. " src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
oh that's right, I forgot about that brief stint in '04... it was just a few months that time, wasn't it? But he really proved himself capable over those few years. And got the best mentoring anyone could ask for....!
Right, so almost 3 years rather than more than 3 years. I was thinking mostly of when TC really started handling the day to day stuff...
I know right? To hear some of the pundits go on about Cook, it's almost like the sheer enormity of that figure is completely lost on them.
77 MILLION pocket computers, in a single quarter. Do we have final numbers on how many iOS devices were sold in 2013? Close to 200 million I'm guessing...
I was replying to two entirely different threads. The wall street view is a different one. This was about:
You: ... as a supply chain guy... sure.
Then my response. Where is the "wall street perspective" in that exchange? Sorry, you lost me. This here wasn't anything to do with the discussion of margins we've been carrying on....
So, in this thread, I asked what it would take for you to see TC as more than just "the supply chain guy"... you've been expressing doubt comparing him to John Sculley.... or did I misunderstand something there?
Sorry... I'm old... I get confused.
I'm not comparing Cook to Sculley per se.
Both Cook and Sculley were/have been increasingly very profitable. Both men followed on the heels of successful product introductions by Steve Jobs. Both men did not/have not introduced any new product categories (actually, Sculley introduced the first laptop).
I've seen one of Tim Cook's forays into developing a new product, the 5c, and I'm hoping that isn't any indication of the success of any new product categories.
As far as Apple's financial success under Cook... I'm betting there are at least a couple of other guys on the planet that could have done that much. The real test will be Cook's ability to grow the company beyond its current boundaries... in the same manner as Jobs.
So, yes... I need more evidence of Cook's ability to grow the company. I already know that he can keep the products alive that were developed under Jobs.
Comments
You're not getting it. It is an incremental movement when considered q to q but it a move downward when looked at yoy. What is supposed to be Apple's best quarter and, for all intent and purpose, the quarter where you would expect margins to be sustained from the last q. When you say that +.9 balances out -.7... are you kidding? Really? Start adding up the difference between earnings from each quarter and then you will find out that the two don't even come close to cancelling each other out.
You've proved my point by saying that 40% or greater margins are not sustainable. Exactly what Wall Street is hearing.
So, next year, let's say it drops another .7%... even if the q to q is up .9%... then what happens.
I don't know what I'm not "getting", man. YoY vs QoQ? Increment vs trend? I'm suggesting the major correction happened over a year ago, and since then we're seeing an improving "trend" comparing margins to revenue. Reflected in the past couple of quarters especially... a stabilizing of margins (I see it, and you say I need glasses. Are you even looking at what I'm referring to?). I don't believe we will see a further significant erosion of margins (the kind that matter to the bottom line or long-term health of the company). The supposition of a further YoY decrease of fractional margins (which don't really matter unless they continue long term) is correct, but I don't see that as an ongoing trend.
And I'm not sure what your point is/was to be honest (what I supposedly proved for you?)... a year ago, I was discussing what I saw as a pretty substantial "correction" to their (even then) unrealistic margins. You couldn't sustain those high margins long term and maintain competition, etc. When they adjusted from >40% to high 30s (running roughly between 37 and 38 pretty consistently since) they actually improved their flexibility, ability to adjust to conditions and competition, etc. So, we agree in principal about the >40% margins not being sustainable... but that's REALLY old news!
I don't think growing the margins again from where they are now is actually healthy or desirable. They even have some room to decrease them in a positive way (because not all margin reductions are bad things). I'd probably be happiest if they could ride between 35 and 37. That to me is very sustainable, allows for solid revenue / net profit growth (in real terms, not percentages) while remaining competitive and flexible.
Saying Wall Street is all about the margins is in a small way shifting that "need for growth" philosophy into margins, where there is an inherent ceiling. That shouldn't be the criteria at all. And building on a perception of "shrinking margins" is not accurate if you're implying that they're falling dangerously, or anywhere near distressed levels.
Meanwhile there isn't any measurable or foreseeable ceiling to Apple's revenue growth. The stuff that really matters. Stay in the mid to high 30s for margins, and keep growing revenue. That's a healthy picture. The margin correction in late 2012 was a necessary one. Now we're cruising in high-gain mode. I see margins stabilizing. Why do you see a different picture?
Now I wonder if it's you that doesn't get what I'm trying to say here?
... as a supply chain guy... sure.
He's been heading Apple on and off for over 5 years. At what POINT do you finally give the guy some due??
He clearly isn't doing a bad job. Old saw or no, Apple is has grown huge and is growing huger by leaps and bounds under his leadership.
I may not like his style as much as Jobs', but I can't fault the job he's doing. The team is awesome. The leaps forward last year alone were fantastic, as well as foundation building steps.
What I can do with my iPhone, iPad, MacBook Air and iMac together (due to how iOS, OSX and iCloud work together, not to mention app interoperability) is pretty groundbreaking stuff. Most of that has come together in just the past 12 to 18 months.
I'm sure Jobs had a hand in that. These things didn't happen overnight. But SJ has been gone for over 3 years. His legacy and inspiration remains. And the team today is rocking it WAY better than Sculley and his crew ever did.
I never had much faith in John Sculley. Had serious doubts from day one. He proved my misgivings right. I have the opposite view regarding this team.
I'm surprised you feel any differently having the comparisons at hand.
Pause and reflect on something. 77 MILLION iOS devices (not counting iPods) last quarter alone.
Immensely profitable quarter.
No end in sight for that momentum.
At what point do you finally put aside the cynicism, and just say "wow"....?
Since 2004, really. He took over during the first cancer bout.
But SJ has been gone for over 3 years.
October 2011.
77 MILLION iOS devices (not counting iPods) last quarter alone. Immensely profitable quarter.
That’s grounds for dismissal, that is.
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
Should these quartely results had been obtained under S. Jobs, everyone would had been happy
He means ex ante, not ex post.
How well did Apple fare in CY 2013 (2012)?
in billion $
revenues: 173.99 (164.69)
net profit: 37.03 ( 41.75)
in million
Macs: 17.11 ( 17.00)
iPads: 74.23 ( 65.70)
iPhones: 153.46 (135.80)
And you know the current team doesn't have the vision? I suppose they could release some half baked thing ala Galaxy gear just to prove they're innovating but I'd rather have them release things when they're ready, not just to scratch wall streets itch.
Again... WTF are you talking about?
Do you just respond without reading the other person's post.
So everyone says Apple is DOOMED but yet still come up with unrealistic targets and then when Apple doesn't meet them punishes the stock. And punishes the stock even though numbers outside of North America were up pretty much across the board. When Apple does well in North America it gets downplayed. This quarter they did really well overseas and the focus is on North America. No matter what Apple does it can't win.
Give your head a shake. Why do yo give a sh*t what Wall Street thinks. Damnit man. Apple is healthy. That's all that matters. For that, Apple is winner all the way.
Now let's hope that Cook isn't just good at spitting out products but that he can choose another category winner that will continue Apples stellar growth.
He's been heading Apple on and off for over 5 years. At what POINT do you finally give the guy some due??
He clearly isn't doing a bad job. Old saw or no, Apple is has grown huge and is growing huger by leaps and bounds under his leadership.
I may not like his style as much as Jobs', but I can't fault the job he's doing. The team is awesome. The leaps forward last year alone were fantastic, as well as foundation building steps.
What I can do with my iPhone, iPad, MacBook Air and iMac together (due to how iOS, OSX and iCloud work together, not to mention app interoperability) is pretty groundbreaking stuff. Most of that has come together in just the past 12 to 18 months.
I'm sure Jobs had a hand in that. These things didn't happen overnight. But SJ has been gone for over 3 years. His legacy and inspiration remains. And the team today is rocking it WAY better than Sculley and his crew ever did.
I never had much faith in John Sculley. Had serious doubts from day one. He proved my misgivings right. I have the opposite view regarding this team.
I'm surprised you feel any differently having the comparisons at hand.
Pause and reflect on something. 77 MILLION iOS devices (not counting iPods) last quarter alone.
Immensely profitable quarter.
No end in sight for that momentum.
At what point do you finally put aside the cynicism, and just say "wow"....?
WTF are you talking about?
We're talking about Wall Street's view of Apple. Not mine. I'm giving you the reasons as to why Wall Street is reacting the way it does. At least that was where this started. You can go off on any tangent you want... but it has nothing to do with me.
F*ck me!
Less shareholders, but no long term value created; a complete waste of time, effort and money.
Stock buy backs are only a good investment for shareholders if the
company is likely to be valued more in the future than it is today.
Last October Amazon reported a LOSS of $41,000,000, and the next day the stock goes UP $30??
Reality doesn't exist on the stock market....
WTF are you talking about?
We're talking about Wall Street's view of Apple. Not mine. I'm giving you the reasons as to why Wall Street is reacting the way it does. At least that was where this started. You can go off on any tangent you want... but it has nothing to do with me.
F*ck me!
I was replying to two entirely different threads. The wall street view is a different one. This was about:
Tallest: The decade and a half [[Tim Cook has been]] at Apple thereafter has already disproven it.
You: ... as a supply chain guy... sure.
Then my response. Where is the "wall street perspective" in that exchange? Sorry, you lost me. This here wasn't anything to do with the discussion of margins we've been carrying on....
So, in this thread, I asked what it would take for you to see TC as more than just "the supply chain guy"... you've been expressing doubt comparing him to John Sculley.... or did I misunderstand something there?
Since 2004, really. He took over during the first cancer bout.
October 2011.
That’s grounds for dismissal, that is.
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
oh that's right, I forgot about that brief stint in '04... it was just a few months that time, wasn't it? But he really proved himself capable over those few years. And got the best mentoring anyone could ask for....!
Right, so almost 3 years rather than more than 3 years. I was thinking mostly of when TC really started handling the day to day stuff...
I know right? To hear some of the pundits go on about Cook, it's almost like the sheer enormity of that figure is completely lost on them.
77 MILLION pocket computers, in a single quarter. Do we have final numbers on how many iOS devices were sold in 2013? Close to 200 million I'm guessing...
Yeah, definite grounds for dismissal
oh that's right, I forgot about that brief stint in '04... it was just a few months that time, wasn't it?
You’re right. It was roughly, what, five or six months while Steve recovered from his first operation.
I was thinking mostly of when TC really started handling the day to day stuff...
Oh, you’re right. And Steve officially resigned in August, having been at home for months before that…
WWDC was the last time we saw him on stage and probably around the last time Steve had any big involvement in day to day.
I was replying to two entirely different threads. The wall street view is a different one. This was about:
You: ... as a supply chain guy... sure.
Then my response. Where is the "wall street perspective" in that exchange? Sorry, you lost me. This here wasn't anything to do with the discussion of margins we've been carrying on....
So, in this thread, I asked what it would take for you to see TC as more than just "the supply chain guy"... you've been expressing doubt comparing him to John Sculley.... or did I misunderstand something there?
Sorry... I'm old... I get confused.
I'm not comparing Cook to Sculley per se.
Both Cook and Sculley were/have been increasingly very profitable. Both men followed on the heels of successful product introductions by Steve Jobs. Both men did not/have not introduced any new product categories (actually, Sculley introduced the first laptop).
I've seen one of Tim Cook's forays into developing a new product, the 5c, and I'm hoping that isn't any indication of the success of any new product categories.
As far as Apple's financial success under Cook... I'm betting there are at least a couple of other guys on the planet that could have done that much. The real test will be Cook's ability to grow the company beyond its current boundaries... in the same manner as Jobs.
So, yes... I need more evidence of Cook's ability to grow the company. I already know that he can keep the products alive that were developed under Jobs.
No he didn't. The stock was heavily shorted a week before the earnings announcement.
Wrong! Apple had a very LOW short interest and typically has an extremely low short interest as a percentage of market cap.