This page has been archived and commenting is disabled.
AAPL Beats Expectations As China Becomes Dominant iPhone Market; Cash Jumps But So Does Debt
Moments ago AAPL reported Q2 earnings for the quarter ended March 31, 2015 which saw AAPL beat soundly on the top and bottom line as as result of a jump in iPhone sales, even as iPad and Mac sales came in below the expectation. EPS was $2.33 vs consensus $2.16, while revenues came in at $58.0 billion, $2 billion higher than the $56.0 billion expected.
While as expected AAPL had little to say about the Apple Watch launch, merely noting that it is aiming to reach a supply-demand balance for the product by quarter end, the breakdown by legacy product line reveals that it is still all about the iPhone, whose sales came in at 61.2 million above the 58.1 million expected, driven by a jump in Chinese demand, with iPad sales being cannibalized, while Mac sales dipped to 4.6 million, below expectations and the lowest since Q3 2014.
The result was a top-line number that once again beat expectations, coming in at $58 billion for the March 31 quarter.
But while AAPL certainly boosted sales volumes, one may wonder if it didn't take too much of a margin hit, with the average iPhone ASP of $658.5 coming well below the $687 expected.
As some had expected, the ongoing surge in AAPL sales is courtesy of China, where as the CFO reported, the iPhone outsold the US, while total China revenue was greater than all of Europe for the first time ever.
And while everyone is commenting on the surge of total AAPL cash to over $193 billion, a jump of $15.5 billion...
... what most are forgetting is that AAPL increasingly has a lot of debt, some $44 billion to be specific since it does not want to repatriate the bulk of its offshore cash, which means that its cash net of debt rose more modestly, from $142 billion to $150 billion.
As long as AAPL continues to be shareholder friendly, don't expect the net cash number to rise much more than its current level.
But while the operations were impressive if China and iPhone centric, what everyone is focusing on is the AAPL news that it once again expanded its buyback program en route to hitting the Goldman forecast of a record $900 billion in 2015 for the entire S&P500, by announcing it would boost its buyback authorization by more than 50%, from $90 billion to $140 billion.
The full announcement:
Apple today announced that its Board of Directors has authorized an increase of more than 50 percent to the Company’s program to return capital to shareholders. Under the expanded program, Apple plans to utilize a cumulative total of $200 billion of cash by the end of March 2017.
As part of the revised program, the Board has increased its share repurchase authorization to $140 billion from the $90 billion level announced last year. In addition, the Company expects to continue to net-share-settle vesting restricted stock units.
The Board has also approved an increase of 11 percent to the Company’s quarterly dividend, and has declared a dividend of $.52 per share, payable on May 14, 2015 to shareholders of record as of the close of business on May 11, 2015.
From the inception of its capital return program in August 2012 through March 2015, Apple has returned over $112 billion to shareholders, including $80 billion in share repurchases.
To assist in funding the program, the Company plans to continue to access the domestic and international debt markets. The management team and the Board will continue to review each element of the capital return program regularly and plan to provide an update on the program on an annual basis.
Yet it will, because as a result of its cash being landlocked in foreign countries, mostly China, the company's debt has increased from $16.7 billion a year ago to $43.9 billion this quarter and is now rising at an aggressive clip.
- 27520 reads
- Printer-friendly version
- Send to friend
- advertisements -







Absolutely stunning at how horrible ZH is on AAPL. Keep stackin your uselss coins bitchez!!!!
Someday, a share of AAPL will be worth infinity dollars.
Where do they go from here? Telephone business good in China, what else is going so great and what is the line up of new products?
iTelevision ,, but the launch version will only receive analog signals and have a 75ohm input... The AAPL fanboies will buy the $15,000 42" model in droves.
I-Pussy?
cmon, jobs was clearly gay.
you iCock
AAPL is balancing on the head of a pin. They are one bad phone release away from losing half that revenue.
And consider what would happen if the economy in China and in the West crashes again.
"Make hay while the sun shines" but Apple has a monoculture crop.
Diablo,
Lets hope 'your' generation is not as IGNORANT and SELF-ABSORBED in NONSENSE as you are or we are in for one HUGE disappointment 30 years from now....
Fuck aapl fucking communists bastards. Can't wait till the death of that company
I believe you might need to study up some on economic systems.
They are kind and gentle capitalists in sunny Cupertino, and green too.
Never mind that their product is manufactured by slave labor under a Communist regime that pollutes the land water and atmosphere with a vengeance, persecutes the religious, and censors the Internet.
"On Monday, Apple said its revenue in the second quarter surged to $58 billion, up from $45.6 billion a year earlier. Net income was $13.6 billion. Apple reported earnings per share of $2.33, up from $1.66 a year earlier."
What was it Reggie M. said about Apple, last year..??
great news...
now, "welcome to the recovery...."
Fuck Apple.
so ... chinese are paying $658 for a phone? how much do chinese make per year?
I'm sure they will pay that every update without question.
I've been to China. Half the Apple phones you see are fakes. Most people don't have $600 to spend on a phone. Not when a superior Xiaomi is $200.
They aren't targeting most people.
Goal : multiple tracking systems in every purse and pocket and wrist.....all paid for by the targets.
Fuckin brilliant.
not surprising for iClone. the masses are hook, line and sinker on wanting to be somehow more chic, cool and hipper than the 7 billion people on the planet. talk about chasing a dream.
i still dont get what these stupid sheeple see in this company.
this company was once an innovative one with steve jobs around, but since he has passed away, they have not come out with any really new earth shattering products, and they continue to fucking sell basically the same phones, just with a different number next to it.
this ''market'' is the biggest fucking joke i have witnessed in my lifetime.
yeah - I mean, I just dont get ZH on Apple. Diablo's right.
Sometimes it helps to be a little bit more familiar with the tech/specs maybe, but sheesh....
The watch is interesting.
Then again, black kids with no money are all of a sudden spending heavy dough on Beats by Dre 0 though there are far better options at BBD price points. They are shit compared to Sony, some no names, let alone Bose....
But Bose wasn't aimed at gullible urban youth.
plenty of people with 4/5 hundo to spend on a neat new toy.
Surprised they haven't shaved more off though - like another 50/75 lower.... make it up on the back end anyway with apps and shit.
China should nationalize all global patents.
All they need to do now is mount a small caliber automatic weapon on the side of it,and I might buy one
I like your thinking ,,, disguise the barrel as the headphone jack and make it a single shot assasination weapon...
or , just buy a 1911 and a low end Samsung , pocket the change and call it a day.
It is so sad that people believe Apple sold all those phones in China. Apple makes GM look like a channel stuffing amateur. Every phone in China is prebooked as sold before it even makes it to a shelf. Most never sell and just wait for filling a landfill.
Xiaomi, Lenovo, OnePlus, and the rest of the Chinese homegrown companies are eating Apple's lunch. There is no American fruit company dominance in China. The iPhone is two years behind in specs and three times more expensive.
The iPad is dead, the macbooks are woefully behind, and the watch is a pitiful excuse of a smug exercise. The only reason why AAPL trades higher is because of buybacks and the stupidity of the investing public allowing the financial media brainwashing to take hold.
It's called boomerang product. You push the product into the channel and it boomerangs back into your warehouse within 3-6 months because it was never sold.
iphone china = boomerang product
Stock buyback is the precise opposite of stock rights issue. A rights issue is what a company does to finance growth.
After all, if you did a rights issue, and then a stock buyback of the stock you had issued you would basically be back where you started.
It means Apple is expecting, and preparing for, a huge worldwide depression.
And they are not wrong.
I believe that margins were 40.8%, ZH has been talking about margin hits for several years now
When does O'bummer say they make too much money and it isn't "fair"?
These numbers are so bogus. Has anyone wondered whether Apple's cash management firm, Braemar is actually front running the buybacks, selling into them, then reapportioning gains to the various products. Remember money is fungible, and the cash at Apple is simply promoting its own internal HFT manipulation.
apple has its eye on education. every school will run on Ipads! total monopoly!
"The meek shall inherit the earth" ( sheep) what they meant!