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Apple's Quarter In Charts
The highlights from Apple's just released third quarter ended June 30.
First the good news:
- EPS $1.28, Exp. $1.23
- Gross Margin 39.4%, Exp. 37.8%
- Mac sales 4.4 million, Exp. 3.9 million
Now, the bad:
- Revenue: $37.43 billion, Exp. $37.93 billion
- iPhone sales 35.2 million, Exp. 35.3 million
- Q4 revenue guidance between $37 and $40 billion, Exp. $40.6 billion
So beat on EPS, margins and Mac sales, miss on revenue, iPhone sales and weaker Q4 topline guidance.
As for cash usage: "We generated $10.3 billion in cash flow from operations and returned over $8 billion in cash to shareholders through dividends and share repurchases during the June quarter,” said Luca Maestri, Apple’s CFO. “We have now taken action on over $74 billion of our $130 billion capital return program with six quarters remaining to its completion."
All in all a rather uneventful quarter as the company prepares for the all important iPhone 6 release in two quarters, and a test of whether it still has the magic to wow consumers with a new product launch.
The key charts:
Revenue
Margins
Product breakdown
Greater China Sales
Cash and equivalents
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To the moon, Alice. to the MOON!!
That was my feeling going into the close today so I sold at load of call spreads. Call it the Costanza trade. So far so good though I still fully expect AAPL to gap up 5% tomorrow on no volume and the bad earnings as I'm sure people are brushing it off as weather related.
Damn polar vortex strikes again!
Does delivery to a remote channel stuffed mega-warehouse in China count as a sale ? ... just curious.
Channel stuffing, especially among tech companies, is a time honored--and legitimate--method of stock-price management.
Then there was Miniscribe!
https://en.wikipedia.org/wiki/MiniScribe
MiniScribe’s failure centered on one of the first major accounting scandals in the computer industry; after losing a supply contract with IBM's PC division in 1985, MiniScribe falsified its sales records for several years before being discovered in 1989.
The primary scandal erupted in the final weeks of 1989, when after failing to procure short-term financing, the company executives decided to embark upon a fraudulent course of action to bring in the financing unwittingly from their customers. As each unit sold was tracked via serial numbers and also sat uninspected for some weeks inside warehouses in Singapore awaiting use in production, the decision was made to ship pieces of masonry inside the boxes that would normally contain hard drives. After receiving payment, MiniScribe then planned to issue a recall of all the affected serial numbers and then ship actual hard drive units as replacements, using the money received to meet financial obligations in the short term.
Worked at Coopers & Lybrand back in the 1980's when C&L picked up Minscribe as an account. Almost was sent to Miniscribe on the audit but thankfully ended up on another account. The audit was run out of the Denver office and was a dissaster. Numerous horry stories about not just how blatent the inventory/sales fraud was (i.e., packaged masonary/bricks, distributors out with nine months of product and right to return if unsold, etc.) but also complete lack of accounting controls, ethics, etc. No suprrise about the ultimate failure. Also would like to note that at this time, I believe the C&L office in Denver also managed the Silverado Bank/Savings & Loan audit. This was another monster failure that I believe included some of the Bush family as owners. Not a happy time in the C&L Denver office and thankfully I was able to avoid these audits and exit into private industry.
Miniscribe really set a new standard in channel stuffing/revenue manipulation to ensure it met revenue/unit sales targets, no matter what.
Its more simple than that.... Just call a friendly retailer and have them agree as a favor to take 1M units at your quarter close. You report the 1M unit sales but oops, their promptly returned. Legally; the units only have to physically depart the supplier site for the revenue to be booked. The receiever site does not even need to receieve them... Just let the trucks sit a block away and then drive the units back.
This is the longstanding method to report (juice) a good quarter. To return the favor, you simply do the same thing for the retailer. Right before their quarter ends, you agree to buy a shit ton of their junk. Again, you won't even take delivery.
Modern Wall Street economics gentlemen.
Or keep the Shop Clock open and keep shipping...puts you behind for the next month...quarter etc. but..hey...it's all about this month or quarter.
rt
Ask Samsung...
peak apple ...
who needs sales when you have all that cash and I-con tweets to goose the stock price
Funny how the nasdaq futures go ballistic when APPL beats, but just shrug when it's an apparent miss. This 2 dollar pullback on the stock will be seen as a chance to BTFD. The Mainstream financial media is in constant jizz mode about the iPhone 6.
I will say that both MSFT and APPL, who just missed after hours for all intents and purposes, telegraphed their results in the past few days: MSFT laid off a lot of workers (their Earnings missed, revenue beat), and the info on APPL orders got out early (hmmm...revenue anyone?).
Bad quarter (relatively), no other way to put it. That said, it really doesn't matter as dreams of lollipops, unicorns and an iPhone 6 dance in analysts' heads
I wish I had bad quarters like that.
Give me your last few years financial info and I'll tell you how you did this quarter. The problem is that it is becoming a one product company again, unless all of the cool kids start wearing calculator watches like 1985 I don't see a new one. Relatively speaking, this was a disappointment given the whisper numbers
Here's my bold prediction: personal information technology is more or less fully developed, no more amazing wonders down the road for a very long time.
As I've said before, to stay (relatively) relevant, Apple can become the Bang & Olufsen (or Coach Bags) of personal tech - maybe.
I see there are some Apple stockholders here. I buy the company's product, but it's becoming a one trick pony. Macs will always be niche, iPods are obselete, the watch is the dumbest idea out there, the iPad is going to be cannibalized. They are a phone maker who doesn't have the edge it did a few product cycles ago. Doesn't mean they won't sell a zillion iPhone 6s, but they need some innovation. You disagree?
good insite. many creatives left '08-'11. Paid a lot to keep Jony in '11, last real product man at AAPL. Shrinking product line too.
correct ... how many remaining human limbs can they adorn with a mini-machine before the stupid humans say no mas....?
The brain chip is the last frontier. Seriously, the term "wearables" is the analyst favorite now. WTF does that mean? It's a calculator watch that tells you your heart rate. No one is going to wear those things
I like Apple
their products, their people, their financial figures
all good
over and out..
Now or in 2007 ? Then I can rate the comment.
Apple products are going to become increasingly difficult for people to afford.
Apple is hugely leveraged as they are a proprietary niche company.
Not exactly bullish.
yes & to keep prices, acc'y pulled out of boxes and sold sep. at higher prices. full PC market in consumer is almost dead. US desktops are at '93 levels.
Nah, you can't afford it, fkn finance it!
AAPL busy buying own stock - did take low% loan already to buy stock back.
I trust Barclays for financing. They are always there for all my Apple needs, wants and desires. The customer service is outstanding. Thanks Barclays for being my friend.
I appreciate your sarcasm CaptainSpaulding.
Down voters/Apple devotees - you need to remember one thing - Steve Jobs is gone.
the white haired, geriatric, umpa lumpa better be up early to juice the futes
The Q before nu product IP6 bears inventory costs to supply follow-up Q sales push. IP6 is kinda letdown. Very few really creatives left at AAPL, except Jony. Nu MacPro good but too expensive for shrinking consumer market on PC. Cost inflation taking toll - acess'y not included and to buy them bend over + shrink productlines i.e., no more monitors, etc.
Damn good company.
Where is Reggie "Apple's Margins are going to decrease" Middleton? $164.5B in cash folks. Just wait until the iPhone 6 comes out ladies, next two quarters going to be big. Junk away poor people!
I don't think there is a person in the world that doesn't think they are going to blowout all records with the iPhone 6. The problem comes after...what's next? What else can you put on a phone? Do they have anything else in the pipeline besides TV and watch? Once upon a time the stock market discounted the future.
Would someone please explain this article to me?
Apple to suppliers: Gear up for the next iPhone - MarketWatch
Is APPL just stockpiling because of bad western/sino "juju", or is there really that much demand?
The real question is based in this simple growth scenario. BRICS are the key to Apple's growth (with the exception of current users that are hoodwinked into buying the new version) yet the BRICS are really starting to move in another direction from a global economic growth and management perspective (as well as policitally). When growth is dependent on a group of countries that the US administration appear to piss-off and aggitate just about every day, I'm wondering how this will play into Apple's growth plans.
Not saying Apple won't continue to grow but geopolitical issues may really start to impact this company, as well as others (e.g., IBM, Cisco, etc.), so growth may be harder to come by and far more expensive to secure.
Emerging markets are more price sensitive and less enthusiastic about buying overpriced hype items at nosebleed prices.
Yes, they have hardcore moronic fans the world over who still believe $600 for a defacto status symbol is worth it, but millions more actually want something affordable that gives value-for-money.
If Apple stalls in emerging markets, which it will, it's just a question of when, don't blame it on geopolitics. They built an empire selling overpriced hype, and when the hype fades(it's not quite fading yet, but it is not shining as brightly now), they will die by it.
Just like how awsome Nike used to be, remember those?
Arguably Cook may have realised making their products more accessbile was the better path to long-term sustainability, but unfortunately the entire Apple brand was built by Jobs single-mindedly to be a premium-only profit machine, and there's not much room to go a different direction once the brand is cast.
How long they can milk the premium-prices out of gullible fans is the real question here, they probably still have some years left yet, but it won't be forever.
All phone companies go to shit. Motorola. Nokia. Apple is next. Face it - no iPhone and Apple is worth nothing more than cash reserves. Remember that story about how iPod/iPhone/iPad was going to really boost Mac sales? Funny how that never happened.
No surprises here. SOS...