back to article BREAKING NEWS: Apple makes money

Apple has kept up its record pace, posting a third-quarter profit of $10.67bn (£6.43bn), up 38 per cent year on year, from revenues of $49.6bn (£31.8bn). The Cupertino giant said it flogged 47.5 million iPhones in what was its best-ever third fiscal quarter performance [PDF] to date. Revenues from the three-month period to …

Anonymous Coward

Record profits yet Wall St says No

To have close on $20B wiped off their market cap on the back of these figures is pretty serious.

Donning my MBA tinfoil hat and putting myself into Tim Cooks shoes it might be time for Apple to follow the example of Dell and go private. Then those leeches (sitting pretty after Google's results) can turn their nastyness onto some other target/sucker.

Those so called anal(yists) need to be called to book. Because they only sold 48M iPhones (a record) instead of their wild guesses of 49Million and to have their shares drop so much is just wrong. I have to wonder if some of those forecasts were oiled by outside interests that could gain from short selling on Apple Stock. The SEC should be looking into this.

What if they decide that Google is their next target? Or Facebook or ....

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Re: Record profits yet Wall St says No

Why should variability in the stock price mean they should go private? This sort of thing happens all the time, to a lot of stocks. If you have an MBA you know this, and shouldn't be concerned.

I have an MBA also, and own several thousand shares of AAPL, and this doesn't concern me. I've had the stock for 6-8 years, and will likely hold it for quite a while yet. These daily/quarterly variations based on feelings and momentum would only concern me if I was thinking about selling, or thinking about buying more (if I was thinking about buying more, this would be a good entry point, after a nearly 10% drop that had no basis in the financials)

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Re: Record profits yet Wall St says No

Deary deary me

The stock market is basically driven by fear and greed, but to suggest that Apple goes private is just stupid. For a start, who has the funds to buy the shares of the world's most valuable company (by market cap)? And who would take it private, and why, to what end?

Apple is not a person that can be offended by the change in shareprice. How do you think shareprices are set - by analysts grouping together in some darkened room and cackling over a (computer generated) cauldron? Or by pension funds, insurance companies, hedge funds etc buying and selling based on whether they think they can turn a good enough profit in the future for their investment.

I'm not saying that the capital markets are not without huge issues and have stepped far far beyond sense in a lot of cases, but this is one of the few areas that actually follows what probably should happen. Apple gives guidance on future results, analysts and others say what they think as well, the actual results are published and they are lower, the price moves lower to reflect the lower expectations. I struggle to see what the issue is. If you want to rant and rave at the stupidity of the stock market, go take a look at naked short selling, or the floatation of Box.

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Anonymous Coward

Re: Record profits yet Wall St says No

I suspect it was due to the iwatch flop. Not revealing numbers only means one thing...

Wallstreet had hedged money on it being the next goldmine, as apple have lost 90% of the smartphone market.

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Re: Record profits yet Wall St says No

"Not revealing numbers only means one thing..."

Yes, it means Tim Cook did exactly what, from even before the Apple Watch launch, he said he would be doing in future analyst calls: not revealing the Apple Watch numbers.

The man isn't an idiot, he knew there is no objective yardstick of success in such a new category and that any volume of sales would be judged in relation to iPhone, a category they can't hope to come close to matching with the Apple Watch and that that would be bound to be used for the usual slew of negative press stories. What else do the press have to write about when you are a company that generates so much interest and yet only is worthy of a news story once a year when you release new handsets, tablets and software and for the rest of the time leave the Apple desk journo's mostly just twiddling their thumbs.

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Re: Record profits yet Wall St says No

If you were apple, which scenario would you rather have, 90% market share, but in the pits margins and revenue....or 10% market share but tops in margins and revenue share? Answers on a postcard....

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Re: Record profits yet Wall St says No

"If you were apple, which scenario would you rather have, 90% market share, but in the pits margins and revenue....or 10% market share but tops in margins and revenue share? Answers on a postcard...."

Dunno, let's ask 1985 Apple and see how well abandoning market share to Microsoft in favour of maxing revenue turned out for them.

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Re: Record profits yet Wall St says No

"Donning my MBA tinfoil hat"

If you are an MBA then you should be aware Apple are sitting on what is probably the largest corporate cash pile in history and have no need to raise money from the stock market and so fluctuations in share price are of far less significance to them than for most other public listed companies. Of course they shouldn't be complacent and I understand the influence of share price can have an insidious effect even on cash rich companies, but there is no question over any of Apple's senior management team or strategy. They are very steady hands, so on that score there is no reason for alarm bells or for going private.

"I have to wonder if some of those forecasts were oiled by outside interests that could gain from short selling on Apple Stock. The SEC should be looking into this."

Quite possible, I would put no depth of failure in integrity beyond Wall Street money men, but more likely I think that two very important factors in a multi-variable equation have gone the wrong way, the first, falling short of analyst predictions, most of us normal people don't set much store by - but Wall Street money men do - the second in conjunction with the fears produced by the first has, I suspect, had a multiplier effect; that China's economy has deteriorated.

What the analysts fear has been demonstrated is that a luxury high priced good is more susceptible to worsening economic conditions in China than they had hoped. That might sound obvious to most people, but actually historically consumer behaviour isn't so intuitive. In established markets luxury good sales tend to hold up better than most would think when the economy slows. So demonstration that that hasn't occurred in this case (or even the suspicion it is the reason) means there is likely to have been an adjustment based on the understanding in the immediate future China's economy will be going the wrong way and Apple goods in China won't be quite the safe harbour they were hoping.

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Anonymous Coward

Re: Record profits yet Wall St says No

It turned out with Apple making 90% of the profits in mobile and Microsoft making a $3billion loss this quarter

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Re: Record profits yet Wall St says No

"apple have lost 90% of the smartphone market."

...and yet rake in over 90% of the profits in that market, so I'm not sure your stat is correct,

BTW: watch those caps!

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Already got back half the after hours drop

Looking at the price today, it already got back over half of the after hours trading drop, so the OP's worry about this was unfounded. It is now back within the recent trading range.

Anyone who was worried about Apple not reporting numbers for the Apple Watch and felt that was a bad sign is a fool, because Cook said he wouldn't report them before the product was even released! He stated it was for competitive reasons - not letting others know whether it is a good market to be in. If you choose not to believe that, and think he did it because he feared it would do poorly, it doesn't change anything. He said he wouldn't report results so selling the stock because they didn't report results is rather silly.

The "Other" category it is in doubled, with about $1.5 billion in additional revenue, so seems reasonable they sold about 4-5 million Watches. Maybe the market reaction was that was too low, but estimates of their sales have been all over the place. If Samsung sold four million smartwatches in three months analysts would have hailed that as a big success.

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Headmaster

If Mr Tsipras was to talk nicely to Tim Cook..........

....it could solve Greece's debt problem?

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Without scorning the Greek people, but aimed at successive Greek governments... You shouldn't pay off someone's debts until they have learned the way not to just rack up another one. It's like those damn consolidation loans, you learn nothing, but then "get off the hook", except this time you've used your house as security on previously un-secured loans!!!

Also slightly apple related... I think they may a mistake with the iPad, they don't self destruct after 23.9 months like the iPhone does... I've lost count of the number of iPad2 and iPad3 my friends use, they just keep going and going. That's why sales are dropping in my mind.

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Not many iPads are bought on network contracts. Many iPhones are so more frequent upgrades offered.

But yes, looks like iPads 2 is in line to get iOS 9 so it will keep on going for another year at least.

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> You shouldn't pay off someone's debts until they have learned the way

> not to just rack up another one

Greece now has a significant primary budget surplus.

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"Greece now has a significant primary budget surplus."

I think you mean 'had'. Pre-Syriza they had a surplus, then they got in, rolled back a bunch of budget savings, then things were completely fucked with capital controls. They definitely don't have a surplus now.

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Syriza were ahead of Troika budget targets, and running a primary surplus, up to June. The capital controls will probably have buggered that up, but they're as much the fault of the Troika as Syriza, and the ECB cutting off their banks was arguably illegal.

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Anonymous Coward

I'm confused

"Revenues were also up 9 per cent, $6.03bn (£3.88bn) compared to $6.615bn (£4.252bn) in 2014."

Maybe it's that sort of revenue increase that Wall Street doesn't approve of?

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Dreaming..

I can't wait until they use some of this profit to build things humans may really benefit from...like say, robo-cars....

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It's about expectations

Before a profit announcement, there are expectations amongst market participants as to what the results are going to be. These are a consequence of profit guidance from Apple, leaks, analysis, and rumours about the likely results. The price before the announcement reflects these expectations. If the actual results are better than the expectations, the price goes up. If they are worse, it goes down. Such movements have little to do objectively with whether the company is doing well or badly, but they just reflect the accuracy of the expectations.

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