back to article Apple shares dive after quarterly report disappoints Wall Street

Apple released its financial results for the first quarter of its 2013 fiscal year after the markets closed on Wednesday, and disappointing results immediately drove its stock price down by over 5 per cent. Although Apple posted record quarterly revenue of $54.5bn, a quarterly profit of $13.1bn, and earnings-per-share (EPS) of $ …

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Anonymous Coward

Re: The iThingies are as common as dirt ...

Did you know that Android now has more Malware in 3 years than Windows did in 14 years?

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Anonymous Coward

Re: The iThingies are as common as dirt ...

Wired have it right almost all the Android users I know are using it for phone and calls only and most do not even have data tariffs. Most have never downloaded an app, do not use it for email - it's a full screen phone to them.

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Re: The iThingies are as common as dirt ...

I know lots of people with iThingies. Anyone who bought it for himself is always touting the coolness factor while simultaneously denying he bought it for the coolness factor. (Probably because admitting you're just following the rest of the lemmings is not cool.) Only person I know who doesn't tout the coolness factor has a work issued iPhone.

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AAPL beat their estimates and in a 13 week quarter compared to 14 weeks in the previous year. This just shows analysts can get it wrong. As for iPhone 5 being a failure - how when they sold 47m compared to 37m a year ago and had problems with supply so would have sold more if they could have made more.

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WTF?

Well

I think this shows just how greedy the Wall street types are. If I were earning 13.1 billion a quarter, I'd be quite satisfied with that...Just under 50 Million iPhones in a quarter....

What were they expecting? Tim Cook's "Just one more thing" to be revealing Rumplestiltskin as VP of spinning straw into gold

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Anonymous Coward

Re: Well

This is so reminiscent of Sun just after it peaked. No matter how good the results were, and how close to the predictions, the share price went down after the announcements because the analysts had got used to being impressed by Sun beating expectations every time

Maybe Larry wants a phone company too?

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Anonymous Coward

Analysts clearly don't know enough when Apple give their estimates and beat them so surely that should be what matters. Analysts guess at figures and disagree with each other yet people listen to them.

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They could not build enough iMacs, iPhones or iPad Minis to meet demand which is unfortunate but hardly poor demand. So sales and profits would have been higher! Expect many of these to shift into the following quarter.

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Yet when the same thing happens to Google, people moan about how awful they are for not being able to meet demand.

"Expect many of these to shift into the following quarter."

Typically iphone sales have always been up in the quarter of a new release, then slide the rest of the year (compared to Samsung or Android which outsell them all year round, for example).

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Anonymous Coward

So analysts were wrong yet again...

and the investor sheep react.

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Anonymous Coward

Apple sold 22.9m iPads in the Christmas quarter and 15.4m in the same period a year ago - that's 49% up and they could not make them quick enough. They are not even sure they can balance supply and demand in the following quarter. Sounds pretty positive to me.

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Stop

"Post-PC Era"

And due to it being an Apple article, everyone missed the "Post-PC Era" jab. Of course, it won't be a "Post-PC Era" once everyone has a "Post-PC Device" and circles back to refresh their aging desktop/laptop. Then we'll be in the post-tablet era....

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Re: "Post-PC Era"

I don't think the return you imagine is necessarily going to happen.

It's uncontroversial to say that for some people a tablet is a better device than a desktop/laptop. Those people will migrate one way and then not migrate back the other. So I guess the disagreement is: how many people is that

I'd argue that it's a big number, being a large proportion of those that use a computer primarily for accessing the Internet. I further think that the people that just want to access the Internet are the reason that laptops have made their way into shops like Tesco, and that the £300 Tesco-level laptop is responsible for large volumes because it's so easily available and cheap enough compared to its perceived value to be an impulse buy.

So while businesses — not just technological but anything that involves document preparation or significant digital editing or anything like that, being pretty much all of them — and enthusiasts aren't going to migrate permanently to a tablet, a huge chunk of people are.

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Re: "Post-PC Era"

People buying new PCs to replace an elderly or broken one are not as profitable as people buying one for the first time.

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Re: "Post-PC Era"

The whole "Post-PC" thing is meaningless anyway, since it's so ill-defined. If I'm using a touchscreen personal device for computing, then why isn't it a personal computer. It's a different form, but we still call laptops PCs, even though they're significantly a different form to desktop PCs.

Sometimes it's useful to distinguish between a computer that people use for general purposes, and things that are technically computers but used for a far more restrictive set of things - e.g., consoles, smart TVs, and phones. But if people start using things like phones/tablets for general purposes, then that distinction no longer holds.

Many shops refer to them already as "Tablet PCs". To some degree, most tablets today are still basically oversized smartphones, but this line will become increasingly blurred, and Windows 8 tablets are surely PCs too. Hybrid devices further blur the line in terms of the form factor.

(Yes, I know that "PC" traditionally also meant a particular hardware platform derived from the IBM PC, but x86 tablets blur that line again anyway, and few people these days care or know about that definition.)

Plus I hate the whole "Post-PC" thing as it's almost always spread by Apple fans, most likely posted from their Apple-badged PCs, who also believe "Macs aren't PCs" and hence magically immune to any claims of the end of the PC (Mac is a trademark; the computers are still personal computers - Apple themselves even marketed them as PCs back in the PowerPC era, but now have switched to claiming they're not PCs purely for marketing reasons).

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Re: "Post-PC Era"

If someone primarily only uses a computer for Internet, but not always, what do they use for the other thing? I mean, despite the media claims, my observation is that tablets are being bought more by the computer-savvy people who also have laptops, than by computer inexperienced people never using a non-tablet PC. It's the "enthusiasts" more likely to pick up an extra tablet.

The fact that tablets are mostly still things that you attach to a PC, rather than things you attach devices to, adds to this idea (and USB to go seems a pain to set up, or know if it will work). E.g., whilst I'm sure there might be some way to print from my Android device, if I had the right kind of printer, it's certainly not something that Just Works OOTB yet, or is as easy as clicking print.

Of course I'm sure that eventually this will change, so you can do everything from a tablet, and do so easily, but then as I say in my other comment, at that point they are basically PCs anyway, and the distinction becomes meaningless.

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Anonymous Coward

As with Microsucks...

...all things rotten eventually come to an end.

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Anonymous Coward

Re: As with Microsucks...

Samsung first...

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The real story here

Is the ridiculous expectations of those worthless shits on Wall Streeet etc. $13 billion dollars in profit, a profit margin of about 24%, wtf do they want?

PS I don't like Apple products but I like traders even less.

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Re: The real story here

The $13bn profit is a 2.1% return on their market capitalisation. Before the share price went down, it was a lower return than that. A 10 year US government bond will give you 1.83%.

You can have the best company in the world and still have a share price that is too high for what the company is worth.

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Thumb Up

Looks good to me!

http://money.cnn.com/2013/01/23/technology/apple-earnings/index.html?hpt=hp_t3

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So....

...the idiots on Wall Street got their figures wrong again. That's not news that's a quarterly reinstatement of the facts.

Headline should read "Mystic Meg gets it wrong. Again!"

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Anonymous Coward

It's a case of Apple say 10 the analysts say 13 and everyone is disappointed when they hit 12. iPhone 5 sales up by 10m (27%) despite manufacturing issues and the iMaps problem. iPad sales up almost 50% and again production / supply issues on iPad mini. IMac sales down but again severe shortages.

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"Those moneymen look for growth in profits, not growth in revenues. Obviously."

At the risk of sounding childish - well duh!

Dividends (if Apple choose to pay them) are paid out of profits not revenues. Otherwise a company that doubled revenue, but quadrupled costs would be a good investment when they actually went backwards...

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Anonymous Coward

Its the per item profit, stupid!

The point that most of the people confused about the share price performance are missing, is that a lot of this is being driven by the large drop in per device profit

If you are selling 30% more devices but making the same profit, unless your overheads have risen significantly then you have a problem

It points towards the idea that whilst people are still buying iDevices, they are going for the cheaper versions rather than the flagship variants where Apple make the most margin.

So in order to grow their profit, they need to either sell far more devices at lower per profit device (unlikely, as eventually you hit a saturation limit unless you can successfully convince people that they NEED 2 phones) convince people to buy the more expensive iPads and iPhones (Needs a compelling product however and the incremental upgrade strategy seems to be failing) or launch another paradigm-shifter and race to initial dominance (Because thats easy to do, and every idea is guaranteed to be a hit.......)

Whilst short-termists will look at the headline numbers and say everything is fine. In reality it points towards a troubling trend long-term which NEEDS to be reflected in the share price

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Re: Its the per item profit, stupid!

Spot on. Shares dont just reflect todays value, but future value too. And as you say Apple are making less profit on more products, this isnt a good thing for them.

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Anonymous Coward

Re: Its the per item profit, stupid!

"If you are selling 30% more devices but making the same profit, unless your overheads have risen significantly then you have a problem"

Revenue was up about 17% but profit was flat - they were seriously constrained in supply. For all you know they could have a huge stock of parts (already paid for) but could not physically build the units (until next quarter).

Considering all the bad press over iMaps, they could only ship iMacs in 1 month out of 3 and supply problems with the iPhone 5 and iPad Mini their figures are still great. I would actually expect a relative bounce this next quarter.

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WTF?

Wall street is crazy

$450B market cap in after hours trading. And ~$150B in cash with no debt. That's easy math: Wall Street thinks a company that spins ~$50B a year in profit is worth $300B or 6x earnings. And that they won't find something extra interesting to do with that $150B in ready cash. But Amazon is worth 3500 times earnings, 600 TIMES as much, to Wall Street. I don't get it.

That growth in profit stalled in the Christmas quarter would be a big deal. Except that Apple is laying out huge amounts of capital (capex) for something new and interesting, and is facing higher costs for putting a spike in Samsung's wheels. And they're not engaging in stupid acquisitions that have to be writ down 90% within the year.

According to the 8K filed today Apple owns $98B in long-term marketable securities. If they keep plowing their profits into securities they're likely to become the world's largest investment bank. Oh, how I would love to see the list of securities they own. How would you spread out that much money? As the economy recovers that's going to be a huge driver of Apple's economy. For goshsakes, they could take Intel private without going into debt. They could wire every home in America with gigabit fiber broadband - thrice. For $30B I could get my cat elected President of the US and fill the halls of Congress with her fleas. What somebody with the entrepreneurial spirit could do with that kind of cash boggles the mind.

This is just an insane amount of money. I give up. It makes no sense. Even valued at Microsoft levels of P/E (14) this is a trillion dollar+ market cap company. Stalled growth is no excuse - Microsoft has been stalled for a decade, not a quarter. It makes no sense. Compared to other IT companies Apple's P/E less cash looks like a dog that won't hunt. But it DOES hunt.

Does Tim Cook have cancer too or something? Cocaine addiction? Is there some secret government plot to ban the products? I don't get it. Either there's something going on here we don't know, or the game is rigged. And who can rig the game so well as to manipulate the price of a company worth nearly half a trillion dollars?

I don't care for their products myself. Their cathedral just isn't my thing. But I'm not stupid. Other people do and continue to be willing to pay premium prices for the premium experience they offer. It makes no sense.

I don't get it.

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Holmes

Re: Wall street is crazy

I can see your point but has it has to do wth the way apple does business and what products they produce. Arguably they only sell 3 (maybe 4) products. And arguably there success is a fashion bubble waiting to explode. It wouldnt take much for apples main revenue streams to dry up. I realise they have gazzilions in the bank, but a couple of poor choices, a failed release, god forbid; a recall. and all that cash is used up.

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Anonymous Coward

Share prices

vary randomly and arbitrarily. The 'share' represents a share in the profits (after all a company's sole reason to exist is to make a profit for the shareholders, right) so how are Apple's dividends going?

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Happy

Your Apple doom and Gloom is flawed!

Yes Apple has huge competition from Android and Microsoft and ther model needs adjusting.

You forget Microsoft have come back because they are a $260 billion dollar company. Apple is just a temporary wounded animal worth $450 billion! They are not going to take all this lying down from Samsung, Microsoft and all other competitors.

They will re-invent, re-innovate, headhunt the best in the game and come back greater than ever.

Money talks and makes waves.

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Anonymous Coward

Rik!

Who cares?

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I don't think the results are that bad

Thing about Apple though is the majority of their profit is in two product lines, and the vast majority being in just one. If people do start turning away from the iPhone line in large numbers and they have nothing to replace it then those profits are likely to plummet. Who would have predicted Nokia's position today 6 or 7 years ago. It doesn't take long to go from hero to zero in the technology world. Not that I am wanting Apple to fail, it makes no difference to my life what happens to them.

One thing is for sure if you ask me, Apple at the moment is a ship without a captain. Tim Cook may be a great first mate but in my opinion he is not a captain, he is a number cruncher and Apple needs a products man with some vision at the helm. As for the steady profits on increased revenue. I'd hazard a guess at the reports about the difficulties they are having in building the latest products may be causing more wastage and increased costs as a result. But then I suppose if I was that great at knowing what was going on, I'd be heading up the company, instead of sitting at a keyboard. Still wouldn't mind a share of those profits the Wall Street goons are complaining about though.... I could buy my very own country.

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Re: I don't think the results are that bad

"Who would have predicted Nokia's position today 6 or 7 years ago."

Just about everyone, so it seems - the Apple-hyping media have been predicting the doom of Nokia for years. (Yet still they sell more phones than Apple - Nokia are far from "zero", and Apple have never been "hero", that title now going to Samsung in phones.)

You're right, the news doesn't mean much - but remember it was the media praising how wonderful Apple were because they were number one of this arbitrary statistic that most people shouldn't care about. So fair's fair - if things are no longer good on that measure, it's worth pointing out.

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Anonymous Coward

Re: I don't think the results are that bad

Nokia just announced they are back in profit!

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Anonymous Coward

Re: Apple has a huge problem

The next big thing will be touch and gesture control....Now who is the market leader in that?

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