Fiscal Q1 2012: Apple's biggest earnings blowout in history

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Comments

  • Reply 41 of 89
    Quote:
    Originally Posted by Constable Odo View Post


    If the share price is going to continue to fall, it won't matter to shareholders how much revenue Apple is pulling in. I'm not blaming Apple for the situation, I'm only saying that bullish outlooks mean nothing if shareholders continue to see bearish results. When it comes to Apple, Wall Street continues to look years into the future so that they can devalue the company despite current record earnings. You might say that Apple is being priced to fail which makes very little logical sense, but if the people running Wall Street are represented by John Corzine, then it's perfectly clear. My case in point is that Apple is performing far better than the financial institutions that are claiming Apple's future growth potential is rather limited. What right have they got to decide such a thing when their own institutions are in financial shambles? I don't believe they are qualified to accurately predict Apple's future.



    Guys like Zaky and Dediu enjoy playing with numbers and that's all they see. The people that are actually controlling the market are not true numbers people. They're probably just high rolling gamblers or maybe there's no risk at all because they actually control the market to suit themselves. I'm not sure, but when a company's share price disconnects from fundamentals, then something is most definitely wrong. It wouldn't even make sense to build a successful company if that is the outcome. I've been Apple long since 2004 and I really shouldn't be griping since I've made money but it's getting annoying hearing these protests about the market cheating Apple shareholders because there probably won't be any changes made in the near future. Apple shareholders will just have to suck it up or look elsewhere for share gains.



    I keep wondering if a large stock split, say, 10 for 1 would help. I realize that the total valuation remains the same... but it could change the number and profile of the shareholders.



    As it is, I think the concentration of the shares allows a very few institutions to wield an inordinate influence on the share price.
  • Reply 42 of 89
    Quote:
    Originally Posted by AjitMD View Post


    The law of large numbers is affecting AAPL price. The market cap is huge and is already widely held with large % in most portfolios. It takes a lot of boost earnings. ETC ETC



    Quote:
    Originally Posted by Mister Snitch View Post


    That's it in a nutshell. Who's left to buy? Moreover, as the market itself begins to tank, widely-held Apple must inevitably sink to the 'water level'.



    Neither viewpoint is correct.



    In terms of worldwide share of computers and phones, Apple is still quite small. So is the aggregate sales of tablets, since the market for that is barely getting going. There's potentially tremendous room for growth in all of its major segments.



    Also, even if Apple (a la MSFT) were to just do sideways from here, say, simply growing at the long-run rate of inflation -- which Apple could, sleep-walking -- it would still command a higher multiple if you compared it to other similar assets.
  • Reply 43 of 89
    Quote:
    Originally Posted by wizard69 View Post


    A prudent investor has to be cautious about Apple simply because it's size puts it in a unique position.



    This statement means nothing. Care to explain?
  • Reply 44 of 89
    Quote:
    Originally Posted by Flaneur View Post


    ...



    On topic, I agree with you that Apple's ongoing success, and its likely impetus in getting Samsung to expand in Texas, are the way economies do and should develop. I'm thinking that "the Apple effect" may soon be quantifiable in macroeconomic terms. There have to be secondary effects from putting a computer in everybody's pocket and hands.



    The Texas manufacturing plant interest me, also...



    I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the U.S.



    I suspect that Apple paid for that plant and manufacturing equipment as part of the deal with Sammy... It is possible that Apple owns the entire facility (including land and improvements).



    It would be interesting if Apple could use its financial muscle to get Government and Industry to negotiate a solution to bring high-paid manufacturing jobs back to the U.S... or at least stop the hemorrhaging.



    It was not that long ago, that Apple proudly ran a large plant in Fremont, CA.



    Apple to Close Fremont Plant, Lay Off 345
  • Reply 45 of 89
    flaneurflaneur Posts: 4,526member
    Quote:
    Originally Posted by Dick Applebaum View Post


    The Texas manufacturing plant interest me, also...



    I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the U.S.



    I suspect that Apple paid for that plant and manufacturing equipment as part of the deal with Sammy... It is possible that Apple owns the entire facility (including land and improvements).



    It would be interesting if Apple could use its financial muscle to get Government and Industry to negotiate a solution to bring high-paid manufacturing jobs back to the U.S... or at least stop the hemorrhaging.



    It was not that long ago, that Apple proudly ran a large plant in Fremont, CA.



    Apple to Close Fremont Plant, Lay Off 345



    I'm quoting your whole post because of its challenge to everyone's journalistic tendencies.



    Look how you dug up an ancient story from the LA Times, and how great is that to see at the tap of a finger on your iPad? What can we find out about the Austin Samsung plant?



    Should be really interesting, especially against the legal background, which seems not to matter at all between the two companies.
  • Reply 46 of 89
    Quote:
    Originally Posted by OriginalG View Post


    they also pay a dividend



    Driving the stock to a halt isn't going to force Apple's hand to provide a dividend. Go find some other stagnant stock ala Microsoft for such pleasure.
  • Reply 47 of 89
    wizard69wizard69 Posts: 13,377member
    Quote:
    Originally Posted by anantksundaram View Post


    This statement means nothing. Care to explain?



    My response directly below touches upon this but a truly huge Apple might as well change its logo from a apple to a bullseye. In any event some points below.
    1. Large companies are targets for lawyers. This drains money from a company like Apple. More importantly they will eventually loose a lawsuit that will cost them money.

    2. There seems to be a rather vocal crowd right now that sees success as some how evil. Apple doubling in size so that it is clearly the largest company in the world just gives these idiots something to focus on.

    3. In a very similar manner some in the political world see big companies as a "thing" to exercise their political power against. You will see people in politics attacking Apple simple because it is a big successful company. This is no different than what has happened to Exxon, IBM, Microsoft, AT&T and other companies over the years.

    4. Sheer size brings with it difficulties with respect to growth. Some of the factories in China employ more people than entire states have population wise in the USA. Doubling production is a huge capital investment and requires finding skilled workers. Yes Apple has lots of cash but they are not magicians and can not wave a wand to get instantly functional production facilities.

    5. As alluded to above the political climate against success is a problem. Apple could very well end up paying far more in taxes. This could be a huge issue if excessively sever.

    6. Apple has way to much invested in production in China which leaves them exposed in several ways. For one there is a backlash in the US against Chinese products. More significantly though is that China is becoming very aggressive militarily which could lead to war or tight sanctions against China. It is the old story about having all of your eggs in one basket.

    7. Apple is product thin in its two biggest growth areas. This being iPhone and iPad. Though I believe they will address this with more products soon, relying on a one size fits all strategy is a mistake when you are talking about billions of customers. Ultimately this means leaving an opening for competition that they should close themselves. Studies have shown that to much choice chases away customers but I suspect that the converse also happens, that is to little choice drives customers away. Apple hasn't demonstrated the aggressive product development needed to drive sales further.

    These are just a few issues but if Apple wants to double sales they need to obviously increase production. In some cases they are already fully employing all of a contractors facilities so doubling production might mean investing in another processor factory with Samsung for example. They have the billions to do so but it isn't a shake and bake dinner. It is interesting that Apple has been rumored to be looking at production at TSMC with people taking this as a freeze in relations with Samsung. I rather see it as a prudent measure because they had a real possibility of outstripping Samsungs production capacity.



    This is just one example of Apple having struggles that are a result of their sheer size. A small company that wants to double production often just buys a new machine and sticks it in a corner. To double A6 production they may have to build an entire factory. Which brings up another question, I wonder how much ownership Apple has in Samsungs new factory in Austin. I know a few years ago Samsung was looking for partners, it makes me wonder how much Apple owns of the operation.
  • Reply 48 of 89
    jungmarkjungmark Posts: 6,812member
    Quote:
    Originally Posted by jason98 View Post


    The problem is that the subsequent quarters are not going to be that great. That's what the Street is perhaps afraid of. 4s holiday demand will run out of juice and then Apple will be left in the vacuum for 2-3 quarters in a row until iPhone 5 is out.



    The holiday quarter is historically where most companies make their money. Apple is no different. However, if you're talking about YOY qtrs, Apple has consistently had record breaking quarters over the last several years. That's not about the change any time soon. Oh and prior to the iphone 4s, they still sold a record number of 4's in the Sept qtr last year.
  • Reply 49 of 89
    Quote:
    Originally Posted by wizard69 View Post


    ...



    The problem for Apple is this, if you are one of the largest companies in America, maybe the world how do you realistically become 2X or 4X that size? It isn't easy in the best of times. However you also have a rather negative political and economic climate that you can't divorce from the discussion if you are reasonable.

    ...




    Quote:
    Originally Posted by Flaneur View Post


    ...



    I think you are right that the valuation is now reasonable for most because no one can imagine where 2x or 4x growth is going to come from. Meanwhile Andy's three articles so far are trying to show how short-sighted the general view is.




    Quote:
    Originally Posted by wizard69 View Post


    Short-sighted maybe but uncharted territory for sure. How does a company like Apple double in size in let's say five years. Small companies do so all the time with varied degrees of success but the record is pretty clean with respect to companies Apples size. So you can see there is reasonable concern.

    ...




    Quote:
    Originally Posted by wizard69 View Post


    ...



    This is just one example of Apple having struggles that are a result of their sheer size. A small company that wants to double production often just buys a new machine and sticks it in a corner. To double A6 production they may have to build an entire factory. Which brings up another question, I wonder how much ownership Apple has in Samsungs new factory in Austin. I know a few years ago Samsung was looking for partners, it makes me wonder how much Apple owns of the operation.





    Sorry for cutting up your posts this way... but I want to discuss size -- and the assertion that Apple is too big to maintain its growth rate.



    First, what does size mean? Apple by many measures is a very small company.



    Quote:

    The largest companies in the US based on the number of workers worldwide are not necessarily the biggest in terms of revenue, profits or business locations. Some are much more efficient than others. Apple has fewer than 50,000 workers, but is the largest American tech company. Hewlett-Packard, which is only slightly smaller in sales, has 324,000 people. Apple may be more efficiently run, but it is also in a relatively small number of businesses while H-P makes everything from printers to PCs and has large services, consulting, and software operations.



    America?s Ten Largest Employers





    Or go here and check on where Apple ranks by things like: Profits, Return on Revenues, Return on Shareholders' Equity



    FORTUNE 500 Our annual ranking of America's largest corporations







    I guess my question is what in particular about Apple is so big that it precludes it from maintaining its growth rate?
  • Reply 50 of 89
    Quote:
    Originally Posted by wizard69 View Post


    Even a 14 year old has the capacity to learn, so I expect you will see the light.



    Are you making a personal reference to yourself with that title?
  • Reply 51 of 89
    Quote:
    Originally Posted by jeffdm View Post


    prospective.



    Several of you need to cut out the political rants. Regardless of your viewpoint, if it's political, it doesn't need to be articulated anywhere on ai except political outsider. When i get back, i'll start deleting comments.



    thank you, thank you!
  • Reply 52 of 89
    wizard69wizard69 Posts: 13,377member
    Quote:
    Originally Posted by Dick Applebaum View Post


    Sorry for cutting up your posts this way... but I want to discuss size -- and the assertion that Apple is too big to maintain its growth rate.



    First, what does size mean? Apple by many measures is a very small company.







    America?s Ten Largest Employers





    Or go here and check on where Apple ranks by things like: Profits, Return on Revenues, Return on Shareholders' Equity



    FORTUNE 500 Our annual ranking of America's largest corporations







    I guess my question is what in particular about Apple is so big that it precludes it from maintaining its growth rate?



    As I've said we are in uncharted territory here. In any event Apple is a very big company by a number of measures.



    Take employment for example, you say 50,000 but I suspect it is more than that if stores and subsidiaries are included but that doesn't really matter. Why because so many of its contractors have thousands dedicated to just building products for Apple. Growth in the sense of shipping more product involves growing these resources. So while they aren't direct Apple employees they are a factor in its size and potential for growth.



    On the flip side Apple has little in the way of products when you sit down and think about it. This is a double edge sword though. The lack of alternative products for grow means that a very few products have too be leveraged for all of that growth. So if you double iPhone production that means doubling everything in the supply chain to meet that growth. It is a challenge for sure but it can also be expensive especially if a product suddenly has a downturn in sales. Interestingly here Apple is doing one thing very right, they are getting as much production out of their designs as possible, keeping lines running for the same basic design for years where the rest of the cell industry might get months out of a basic design.



    Another measure of size is influence on the industry. This is where Apple needs to be careful as influence can be taken negatively by some. I do believe the greatest threat to Apple is regulation due to unfounded fears of their size and influence. That and the current general stupidity with respect to profits means that Apple may have impediments put in place that nobody following the company wants to see. You may see Apple as small when you count employees but they are huge when it comes to market influence. Just look at what Mac OS, iPhone, ITunes, iPad and other Apple initiatives have done to their respective industries. The amount of grumbling about just iTunes is amazing.
  • Reply 53 of 89
    conradjoeconradjoe Posts: 1,887member
    Quote:
    Originally Posted by Lochias View Post


    You can point all you like, but most of us would defer to the dictionary. The Free Dictionary (online) says, "A lopsided victory or thorough defeat."



    Others show, "an easy or one-sided victory," "a win by a large margin," etc.



    Easy can be easier; large margins can be bigger. And lopsided can be ... well, you get the idea.



    Educate us, Professor. Where do you get 'blowout' as so uniquely special??



    These "word corrections" are frequent, and almost always incorrect. There's another incorrect "correction" in another new thread.
  • Reply 54 of 89
    conradjoeconradjoe Posts: 1,887member
    Quote:
    Originally Posted by fathomsdeep View Post


    Late Q1, early Q2 should see the release of iPad3



    No way. It will be a 2S. No retina screen, just a speed bump.
  • Reply 55 of 89
    Quote:
    Originally Posted by Dick Applebaum View Post


    I am under the impression, that semiconductor manufacturing, while not labor-intensive, requires the use of toxic chemicals and gasses. And, because of that, health and environmental regulations have made this type of manufacturing uncompetitive/unprofitable in the US



    Wrong. Very wrong and silly.



    I design semiconductor facilities and the EHS regulatory impact on the cost is not even at the "noise" level compared to total costs.



    Why is the USA either the largest or second largest (valid arguments for both) manufacturing sector in the world? Because we are really, really, REALLY good at it. EHS (environmental, health and safety) regulations have almost no impact on costs. Labor costs are a major issue, but we WANT to pay US workers well. Remember Henry Ford.
  • Reply 56 of 89
    Quote:
    Originally Posted by JONOROM View Post


    Wrong. Very wrong and silly.



    I don't mind being corrected for being wrong... but calling an honest impression "silly" is rude and unwarranted.



    Quote:

    I design semiconductor facilities and the EHS regulatory impact on the cost is not even at the "noise" level compared to total costs.



    I have an association with semiconductor manufacturing going back to Hoffman Semiconductor in the 1960s (growing silicon ingots -- and matching lots for Zener diodes on a punched-card calculator) up until having the likes of Applied Materials, National Semi, Fairchild/Shlumberger as a major customers in the 1980s.



    Never been involved in facility design... but I suspect I was in Clean Rooms while you were still in grade school (obviously not learning any manners).



    Quote:

    Why is the USA either the largest or second largest (valid arguments for both) manufacturing sector in the world? Because we are really, really, REALLY good at it. EBS regulations have almost no impact on costs. Labor costs are a major issue, but we WANT to pay US workers well. Remember Henry Ford.



    Do you have any links to support your assertions -- as they are contrary to what I hear?
  • Reply 57 of 89
    Quote:
    Originally Posted by Dick Applebaum View Post


    I don't mind being corrected for being wrong... but calling an honest impression "silly" is just rude.







    I have an association with semiconductor manufacturing going back to Hoffman Semiconductor in the 1960s (growing silicon ingots -- and matching lots for Zener diodes on a punched-card calculator) up until having the likes of Applied Materials, National Semi, Fairchild/Shlumberger as a major customers in the 1980s.



    Never been involved in facility design... but I suspect I was in Clean Rooms while you were still in grade school (obviously not learning any manners).







    Do you have any links to support your assertions -- as they are contrary to what I hear?



    High school, not grade school. Sorry about the "silly" but it appeared to be oft-repeated right-wing propaganda. You have made clear that it is not.



    Worked on my first semiconductor facility design in 1983. Working on one now. Properly handing Arsine (the most toxic of the gasses) may add a million dollars to a facility that will cost a billion dollars to build even before you install the tools, which cost much, much more. But I don't think even in China they take shortcuts with Arsine. In fact, my impression (having never worked on one but seen the designs) is that fabs in the third world are built to templates that are almost clones of those in the USA, whatever the local regulations may be.



    Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:



    http://www.seeitmarket.com/u-s-still...making-things/



    Note that our electronics industry is FIVE TIMES as big as China's.
  • Reply 58 of 89
    gatorguygatorguy Posts: 22,881member
    Quote:
    Originally Posted by wizard69 View Post


    As I've said we are in uncharted territory here. In any event Apple is a very big company by a number of measures.



    Take employment for example, you say 50,000 but I suspect it is more than that if stores and subsidiaries are included but that doesn't really matter. Why because so many of its contractors have thousands dedicated to just building products for Apple. Growth in the sense of shipping more product involves growing these resources. So while they aren't direct Apple employees they are a factor in its size and potential for growth.



    On the flip side Apple has little in the way of products when you sit down and think about it. This is a double edge sword though. The lack of alternative products for grow means that a very few products have too be leveraged for all of that growth. So if you double iPhone production that means doubling everything in the supply chain to meet that growth. It is a challenge for sure but it can also be expensive especially if a product suddenly has a downturn in sales. Interestingly here Apple is doing one thing very right, they are getting as much production out of their designs as possible, keeping lines running for the same basic design for years where the rest of the cell industry might get months out of a basic design.



    Another measure of size is influence on the industry. This is where Apple needs to be careful as influence can be taken negatively by some. I do believe the greatest threat to Apple is regulation due to unfounded fears of their size and influence. That and the current general stupidity with respect to profits means that Apple may have impediments put in place that nobody following the company wants to see. You may see Apple as small when you count employees but they are huge when it comes to market influence. Just look at what Mac OS, iPhone, ITunes, iPad and other Apple initiatives have done to their respective industries. The amount of grumbling about just iTunes is amazing.



    Very well stated! +1
  • Reply 59 of 89
    Quote:
    Originally Posted by JONOROM View Post




    Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:



    http://www.seeitmarket.com/u-s-still...making-things/



    Note that our electronics industry is FIVE TIMES as big as China's.



    Just wanted to clarify, when we talk about the US manufacturing sector being first or second in the world, we are talking about the value of the products produced, not the number of people employed.
  • Reply 60 of 89
    Quote:
    Originally Posted by JONOROM View Post


    High school, not grade school. Sorry about the "silly" but it appeared to be oft-repeated right-wing propaganda. You have made clear that it is not.



    Worked on my first semiconductor facility design in 1983. Working on one now. Properly handing Arsine (the most toxic of the gasses) may add a million dollars to a facility that will cost a billion dollars to build even before you install the tools, which cost much, much more. But I don't think even in China they take shortcuts with Arsine. In fact, my impression (having never worked on one but seen the designs) is that fabs in the third world are built to templates that are almost clones of those in the USA, whatever the local regulations may be.



    Regarding my assertion that we have the largest or second largest manufacturing sector, there has been lots of press but this one is interesting:



    http://www.seeitmarket.com/u-s-still...making-things/



    Note that our electronics industry is FIVE TIMES as big as China's.



    OK... On even keel!



    That link is interesting... It shows that "Office, Accounting & Computing Machinery"

    Manufacturing is 53% in US vs 10% in China...



    I find that impossible to believe. IBM may still manufacture [mostly] in the US but I can't think of any computer company doing manufacturing here.



    (I worked for IBM for 16 1/2 years in maimframe Computer Market Support)







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