Apple Beats On Sales And EPS, Misses iPhone, iPads Sales, China Slows Down: The Quarter In Charts

Tyler Durden's picture

The much awaited AAPL earnings came and unlike previous product launch quarters, it was a mixed picture.

On one hand, both revenues and EPS beat, with AAPL reporting Q4 sales of $51.5 billion, above the $51.0 billion expected, resulting in EPS of $1.96, above the consensus forecast of $1.88.

 

Apple also achieved a higher than expected gross margin of 39.9%, beating expectations of 39.3%, and above last quarter's 39.7%.

 

That was great news; the not so great news was that iPhone sales of 48.05 million missed expectations of 48.5 million, while iPad shipments, now largely cannibalized by the iPhone Plus, not only missed expectations of 10.2 million sales, but declined by 1 million from last quarter's 10.9 million to 9.9 million.

 

Likewise, the geographic breakdown left a bit to be desired, mostly out of China, which at $12.5 billion in sales, dropped notably from last quarter's $13.2 billion, however this was offset by an increase in US sales from $20.2 billion to $21.8 billion, and while Europe was largely flat at $10.6 billion, there was a notable boost out of Japan, where revenues rose by $1 billion from $2.9 billion to $3.9 billion.

 

The forecast given by apple about the holiday quarter was as follows:

  • revenue between $75.5 billion and $77.5 billion, Consensus est. $77.1 billion
  • gross margin between 39 percent and 40 percent
  • operating expenses between $6.3 billion and $6.4 billion
  • other income/(expense) of $400 million
  • tax rate of 26.2 percent

Finally, the number everyone is mostly fascinated by, AAPL's gross cash rose once more, hitting a record $206 billion, up from $203 billion the quarter prior...

 

... however much of this was offset by the increase in AAPL's debt position, which also rose to a new record high of $65 billion, implying that AAPL's net cash has remained largely flat for the past 3 years at just around $140 billion.

 

The machines are in charge of AAPL stock after-hours as high and low stops have been run and now it is fading off the highs...

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thesonandheir's picture

The watch is going the way of Betamax vcr's.

Ham-bone's picture

Funny, I don't see any chart included showing China's declining 0-64yr/old consumer base?  No charts of China's tapped out credit?  No charts of China's slowing wage growth?  Probably just an oversight those aren't included!

Here, I'll take care of it...

http://econimica.blogspot.com/2015/10/explosion-of-china-shopping-centers-for.html

two hoots's picture

Good for Apple, however, American cannot live on Apple alone.  Not sure why that trans index put in a poor showing today given all those Ipad, Iphones to move?

Normalcy Bias's picture

That watch is a good example of what can happen when nerds are surrounded by too many 'yes men'...

abbottmd's picture

I have only seen one person with the watch, it was 3 months ago next to me on a plane. none since

BlindMonkey's picture

Will the apple fanboi that downvoted this please stand up?   Damn.  You will be able to swim in used watches iWatches pretty soon.  There is no reason to be nasty...

Normalcy Bias's picture

Whoever it was likely proselytizes about how cool their iWatch is to people while they're rolling their eyes...

Bay Area Guy's picture

I saw one at the gym this morning on a woman riding a spinning bike. That's been the only one I've seen out in the wilds.

So, if phones missed and iPads missed and they've only sold 12 watches, does that mean Macs and MacBooks went crazy good for sales since they beat the top line?

sun tzu's picture

I haven't seen any yet and I work in a high tech area.

replaceme's picture

So i'M happy and sad for them?

orangegeek's picture

AAPL unit sales down, but revenue up.  Hmmm, that makes sense.

 

What did valeant close at today??

Chia-Pet's picture

Somebody Timmy Cooked the books.

sun tzu's picture

More digital sales and iphone 6 plus is all I can think of

Kaiser Sousa's picture

buy, buy, buy!!!

 

 

 

not.

 

 

pods's picture

I still cannot grasp how a company can gross $51 BILLION a QUARTER.  

Their margins are insane as well.  

Say what you will, someone is buying their stuff.

pods

orangegeek's picture

beware the channels and their ability (AAPL's) to stuff them

venturen's picture

Media drones....if Apple sold an Irock it would be $250 and people would buy it every day with their EBT Never been impressed with their year late technology and all propriety stuff. It is like they invented video conferencing with facetime...about a decade after Skype... I find the it is very non-intuitive. But congrats to them to get heavily indebted people to fork over more debt. Of the 3 iphone I had 2 broke....every other smart phone still works...but I tired of them and upgrade. Each to their own....but people are ripped off bigtime....paying up for the name....and that is why they have to upgrade so often 

adr's picture

I try to figure out how $50 billion is sold into a market that is really only about $8 billion big all the time.

I mean if what is reported by retailers adds up to $8 billion in a market category, how can $50 billion worth of goods be sold to end users?????

It literally doesn't add up. Unless the missing $42 billion is never really sold, but just shifted around and marked as sold.

Remember the product a publicly traded company is actually selling is stock, not end products. Stock makes CEOs and directors rich. Selling product couldn't even pay for one of their yachts.

buzzsaw99's picture

this is part of why i don't feel sorry for people

Enjoy your EXTRA BIG ASS FRIES! [/Carl's Jr. Computer, Idiocracy]

NDXTrader's picture

Last quarter was the last great quarter for this once amazing company. Nothing new in the pipeline until AppleCar debuts never. Their closed system means they can't participate in the cloud revolution the way Amazon and Google can. Pretty much Nokia with apps now

I am a Man I am Forty's picture

As predicted, the numbers were magnificent and ZH is the absolute biggest debbie downer in history.

NDXTrader's picture

Whatever you may think of Apple or ZH this was not an "amazing" quarter. Decent is about all

I am a Man I am Forty's picture

It's the best in the entire fucking world.  What's your measuring stick?  Show me another company in the world that's done better or that is going to do better this quarter?  The answer is no one.

NDXTrader's picture

Whoa, sorry Mrs. Cook (or Mr. If you prefer). Look at their last quarter if you want to see amazing. This quarter I see slowing momentum in China, a stall on phones, iPad is in reverse and the iWatch never got off the launching pad, TV is dead and the iCar is the next idea? Where's the company going? They are a phone maker now that skims profits off apps. This quarter was decent, when compared to the past, and asks a lot of questions about the future

I am a Man I am Forty's picture

Apple is a handheld computer company that just happens to be a telephone too.  It's pretty fucking magnificent.  It's also the best 4th quarter earnings apple has ever had in its history.  The iPad is in reverse because the large iphone is kicking so much ass.  And China is surging.

What is The Hedge's picture

Please explain to me what computational capabilities are inherent in an iPhone. The iPhone is an internet portal that happens to be a phone. Nothing else!!!

NDXTrader's picture

They've already failed as a computer company...twice. They innovated getting to your music and then getting to the internet on a small device (innovate is not really true, they made a prettier package), that's awesome. Apple has done great things, but the operative word is HAS. You made my point for me - they are in a commoditized business now. You can't keep selling $700 products when $100 products have the same features. Ask Dell or Compaq. Or ask Apple which saw this same thing happen before...TWICE. Their closed system has always been the downfall of the company and it keeps them from leveraging the cloud revolution. Amazon, Google and Microsoft are much better alternatives going forward

FlacoGee's picture

Yes, but they "could" be bad in the future.  That is what ZeroHedge is waiting for :)

 

 

sun tzu's picture

Smartphones are fast becoming a commodity. How many people will continue to pay $1000 for an iphone when other smartphones cost $100? That day is coming soon and the AAPL fanbois won't know what hit them.

adr's picture

Isn't it amazing how Apple can sell all those phones in one week during the quarter!!!

20 million Americans upgraded their phones in a week, unbelievable.

What do you mean that isn't how corporate numbers work. 20 million people didn't buy phones, that is just the dollar value of the phones Apple shipped to retailers and haven't even been paid for them yet. PREPOSTEROUS.

I wonder how Sprint, Verizon, and T-Mobile even paid Apple for the phones. Sprint was giving them away for free (well money down), Verizon was selling them for $1 down. Sprint made them $19 a month for two years. Over two years you pay $450 for the phone, but the phone retails for $800.  Where does the money come from to actually pay for the phone????

Apple recorded a sale and Sprint recorded a sale, but nobody actually paid for the phone. Based on Sprint's charges, the phone is only half paid for.

What is it that makes me think this whole thing is a mirage and that even though Apple claims to have over $100 billion in cash, it probably is nothing but accounting bullshit.

Nah, corporations don't lie.

Raymond_K._Hessel's picture
Raymond_K._Hessel (not verified) adr Oct 27, 2015 5:09 PM

You're right about the sudden flood of deals for the phones themselves.

Lots of money still in the data plans, etc.

People always forget about the apps.

android apps - that universe is divided 1000 ways. but apple store and itunes universe is huge and all apple's.

I dont want to be the apple guy on a site that hates apple because if anything I see Samsung and HTC as taking more and more of a lead... but I'm old school enough to not root against American companies - even ones that build all their shit in China.

It's accounting bullshit, no doubt, in large part - but think of it like this: Apple is Barry Bonds, and you can "hate on" them all you want.... but everyone else is doing the same shit as they are [accounting fuckery, selling your data, leaving the seat up, etc.]

Rikky's picture

creative accounting adr.  its what makes the world go round today.

algol_dog's picture

Also, big push from Ipad side to the Iphone 6+, contributed to the high phone sales.

Raymond_K._Hessel's picture
Raymond_K._Hessel (not verified) Oct 27, 2015 5:05 PM

So Apple, which designs and builds things, things that are better designed and programmed, for the most part, than anyone else...

is doing better than just about everyone else, even in a bullshit market flooded with fedbux and day traders...

And that's bad because "apple fanboys" are irritating?

Does not
compute.

Rikky's picture

better designed and programmed than anything else?  you missed that one.

sun tzu's picture

That's what you call a true apple fanboi

adr's picture

I will say that Apple things are better designed, but not better made. Apple has been putting shiny wrappers on substandard parts for years. The Macbook Pro has been a steaming pile almost from the get go. Bad graphics chips, bad screens, faulty RAM, and faulty hard drives. But it looks pretty.

The old Mac Pro Tower was a marvel to look at but a bitch to actually work on. Proprietary everything and parts that didn't last half as long as what you got in PCs that cost a quarter of what the Mac did.

The new Mac Pro desktop seems to have disappeared completely.

For what you pay for an iPhone, it should stand up to a 6" drop. It shouldn't have reception issues or battery issues.

I don't like Samsung either. They used to make the best quality phones, but skimped on quality to focus on pop. I decided to buy a Galaxy Tab S last year and within two months the battery was having issues. They used a substandard battery in order to make the tablet thinner than the IPad. I would have preferred an extra mm or two for a better battery.

Motorola and Sony make the best phones by far. They are built like tanks and last for years. I'm on year three of my Sony TL and haven't had a single issue and the battery still lasts all day on a charge. I've even tossed the thing on concrete without a single crack in the screen.

Apple can afford to channel stuff China to the tune of millions of iPhones. It doesn't mean they are succeeding. Every time I go to China I see more and more people with Xiaomi and One Plus phones. The Chinese don't want American brands anymore. As the population matures as consumers they want homegrown brands. Think Americans wanting to buy Ford trucks. Ford trucks are a laughing stock outside America. Soon all the non Chinese brands will be that way in that country.

FlacoGee's picture

It is not the fanboys that are irritating...  IT IS THE ONE FUCKING BUTTON

ONE FUCKING BUTTON...  BECAUSE STEVE JOBS WAS A FUCKING PSYCHO

ONE FUCKING BUTTON ON A PHONE.   ONE FUCKING BUTTON ON A MOUSE.

Clue:  Two buttons have tremendous value.  

The ONE FUCKING BUTTON demonstrates what Jobs' Apple is all about:  1 FUCKING OPTION WITH OUR ONE FUCKING BUTTON.

 

 

sun tzu's picture

Samsung is still the #1 smartphone company. Android still dominates the market with 83% share. Does that compute?

The apple fanbois can't get over that. LMAO!!!

Oldballplayer's picture

40% margins.

I don't think illegal activities even get 40% margins.

Rikky's picture

still makes me chuckle seeing how many lemmings are stil running out there spending money most don't have so they can own a personal display assistant when there are near identical options for 75% less money.

wmbz's picture

Apple faithful will never ever stop buying their products! It's like a religion.

Can't argue the fact they know how to sell to their customer base...Over and over again!

silverer's picture

What happens is that you gain so little moving into the next set of "have to haves", you finally begin to realize you "don't have to have". 

mtndds's picture

With how f-up the market is I bet tomorrow AAPL will be at all time highs.