Apple Stock

[redsox44]

Apple's last earnings report was so dismal their stock had to be halted in after hours trading in the USA. Seems the "new iPad" is a flop. Their new line of Apple laptops aren't selling due to the inflated price being asked for. To add to their troubles is their inability to deliver the supposed millions of iPhone 5's that they claim to have sold. U see in the States, their biggest market for the phone, if one buys on credit the selling company can't charge the customer until the product is shipped. No tickey, no$$$$$'s. This resulted in extreamly poor quarterly earnings. So much for the billion dollar company who depends on Asian workers to produce their products while they sit back and haul in the cash.

[lomatopo]

Actually the Q3 numbers were quite good, above Apple's estimates, at/slightly below analyst's predictions.

I didn't see anything about a halt in trading of AAPL?

The share price is down from the ~ Sep. 19 high a bit north of $700. Still up ~ $200 YTD.

There is some concern about margins, and getting enough product into the pipeline for the normally strong Q4 - Apple did warn of that in the call yesterday.

Apple has pretty much re-vamped their entire product lines in what, less than 6 weeks?

The unknowns surrounding the tax situation in the U.S. may also be putting some downward pressure on the stock as people are selling to avoid higher LTCG rates expected.

I am not sure when Apple books revenue on product sold through their channels - I assume they have some reliable mechanisms to base this on.

Apple said its net income was $8.22 billion, or $8.67 a share, compared with $6.62 billion, or $7.05 a share, a year ago. Revenue for the period rose 27 percent to $35.97 billion, and revenue for the full fiscal year was $156.5 billion. To put that in perspective, Apple’s revenue for the year exceeded that of Microsoft, Google and Facebook combined.

Analysts surveyed by Thomson Reuters had expected Apple to report earnings of $8.75 a share and revenue of $35.8 billion. The results were well ahead of Apple’s own forecast of $7.65 a share in earnings and $34 billion in revenue for the period.

http://www.nytimes.c...ne-5-sales.html

Edited October 26, 2012 by lomatopo

[nikster]

Apple is officially in trouble. I wish I could be in trouble like this also, $120Bn in the bank (20% of market cap is cash)... unit sales up 20% over last year... iPad mini obviously had zero effect on this quarter...

Who knows what the stock is going to do - I've stopped following the roller coaster years ago, I just hold on to it... been doing well with that so far 5555

I mean really at best, the stock price is crazy speculation. At worst it's willful manipulation by a few big boys. It has nothing to do with the health of the company.

I'd expect Apple to ship north of 100M iPhones over the next year, and at least 60M iPads - the mini could push that somewhat higher though.

The only valid question is how can they possibly top their performance year after year... that's the only concern I'd take seriously.

Edited October 26, 2012 by nikster

[shimizu]

Nothing wrong with Apple's revenue and net income, only with the analysts predictions.

27% revenue increase seems not bad news to me.

Edited October 26, 2012 by shimizu

[ExpatJ]

I think the single biggest and under reported fact that is negatively impacting apple now is that they screwed their customers by removing google maps and youtube - basically Apple's spite against google is greater than their willingness to give customers what they want- and this i think was a slap in the face to many when they realized this.

[Chicog]

Apple has pretty much re-vamped their entire product lines in what, less than 6 weeks?

So their marketing costs might be higher - but they've had plenty of time to retool, so that's no excuse whatsoever.

They've simply run out of ideas.

I think most Analysts were expecting them to be announcing the Apple TV by now - they seem to have lost a lot of their dynamism since Mr. Grouchy passed away, at least he kept them on their toes.

[nikster]

I think the single biggest and under reported fact that is negatively impacting apple now is that they screwed their customers by removing google maps and youtube - basically Apple's spite against google is greater than their willingness to give customers what they want- and this i think was a slap in the face to many when they realized this.

Apart from tech commenters and bloggers - nobody in the real world cares. You can still get Gmaps and youtube on the iPhone, just use different maps. And Apple maps have more features and are better looking than the old google maps, and they're rapidly fixing all the errors.... by this time next year, this will be about as important as "antennagate". Remember that? It seems like a million years ago...

[nikster]

Nothing wrong with Apple's revenue and net income, only with the analysts predictions.

27% revenue increase seems not bad news to me.

Exactly

Now the analysts or tech bloggers or whatever then always claim that "analysts predictions are already priced into the stock". If you really believe that, I've got a bridge to sell you... you're basically believing that the stock market is a rational place where real prices are made. In an ideal world, it would be; in the real world, you have automated computer programs making trades or even just placing orders at intervals measured in milliseconds. The market is dominated by speculators trying to make a quick buck by guessing what other speculators might be doing... it's as irrational as anything. Maybe even more so.

[lomatopo]

Apple has pretty much re-vamped their entire product lines in what, less than 6 weeks?

So their marketing costs might be higher - but they've had plenty of time to retool, so that's no excuse whatsoever.

I think the issue, and management said as much during the call, is that margins (product/COGS) tend to be a bit higher in the life-cycle, and come down as they figure out how to reduce costs - and since there is little price erosion or competition to off-set reduced COGS, profitability can surge.

Apple has historically offered conservative guidance, and analysts have come to understand they need to boost these somewhat, hence the delta between guidance and expectations. In this most recent quarter you can see that the actual results were more or less right at the averages of the analysts estimates.

Of course those analysts predicting $900/share by the end of this year might have forgotten about major overhang issues: election, tax changes, or caught out on all the new product cycles? It is going to be challenging to go from $36 B to $52 B on the top line, even forgetting about margins. Let's hope Foxconn, and all the suppliers, can manage the challenge.

[jbrain]

As with everything, at some point customers see through a jacked up mirage.

Keep in mind. Steve Jobs invented Apple and it was one of the biggest companies of it's time. When Jobs was ousted the company declined rapidly and was nearly dead untill the day he returned.

Unfortunately,this time Steve Jobs can't return anymore.

[Gary A]

Not being able to keep up with demand would be a GREAT problem for any company to have.

ADDED - During the stock market crash, a friend of mine very emphatically told me that I would be crazy if I didn't buy Apple stock for less than $100 a share. He said that the stock would go to $500 and that it would make him a millionaire. Did I listen, NO! It did indeed make him very wealthy. Unfortunately the big "C" claimed him at a fairly young age. (Late 50's). It was a sad thing particularly because he worked in Iraq and was dodging bullets. He then appeared to be on top of the world until he got sick. Life is indeed not fair.

Edited October 29, 2012 by Gary A

[mogandave]

I think Apple remaining a strong, going concern does not have a lot to do with keeping the stock price up. They are currently down over $100 (14%) off their highs, and that trend could certainly continue. Apple hasn’t made me rich, but I’m up over 400% and holding for now. This might be a buying opportunity until the election, but I’m too CS.

I bought Apple after I got my first (and only) iPod. I didn’t use the product much, but there was so much attention to detail, and everything about it was so nice, that I liked just holding it and looking at it. I work in manufacturing, and I have an idea what is involved in putting something like that together. Everything about it from the box, to the documentation to the product itself smacked of quality. I know it seems silly, but that’s what sold me on the company. I buy something Apple about every six months, and the first time it shows up in a cheesy box, I’m selling.

I think the idea that Apple is releasing new products too quickly is silly. People want to buy stuff, and it is when companies run out of new products that they stagnate.

I also think that Apple continuing to offer the earlier versions alongside the newer versions is a brilliant marketing strategy. I could go on and on about why, but I am at work now and I am occasionally expected to get something done.

To be clear, I’m much more concerned about the value of US currency than I am about how Apple performs.

[Chicog]

Not being able to keep up with demand would be a GREAT problem for any company to have.

Yes, but Apple have been using artificial supply throttling for years. People are wise to it now.

Note to Microsoft: Same applies to you.

[lomatopo]

Not being able to keep up with demand would be a GREAT problem for any company to have.

This sounds like something Ozzie might have said to Harriet in a fictionalized version of 1950's America.

Not being able to keep up with demand can kill a product/company in that it results in a market failure. Say you have a lemonade stand and you run out of lemonade, it's hot, people are thirsty and you have no product to sell. Unless your stand is on Wall St. and you've created Collateralized Lemonade Futures you have no way to generate additional revenue. By tomorrow it's cold, or someone else is selling Mango smoothies and you're hosed.

I think Apple remaining a strong, going concern does not have a lot to do with keeping the stock price up.

I also think that Apple continuing to offer the earlier versions alongside the newer versions is a brilliant marketing strategy. I could go on and on about why,

I think you might be a bit naive re: the relationship between a strong going concern and keeping the stock price, P/E, growing?

Apple actually works very, very hard to minimize new/old product overlap in the channel. Product overlap leads to market confusion, price erosion, loss of sales, lower margins, channel dissatisfaction. I fail to see how product overlap could possibly be considered a "brilliant marketing strategy"? It needs to be delicately managed, and minimized.

[nikster]

Apple gets a whole range of cheaper iPhones for "free" - just keep making the old ones. That's why.

I don't know how many older iPhones they're selling - I imagine it's fewer than whatever the latest model is. But in absence of having 20 different products at all price points a'la Samsung, selling the older models cheaper is a good move. And clearly Apple will never have so many new models - it doesn't work.

If I was them, I would make the old iPhones a bit more attractive though - change something to make them fresher. But of course, that's against Apple philosophy. Ive just won't do it. He's probably right though

As for the stock - $1000 by the end of 2013. I am also more concerned about the US currency than Apple stock. I don't understand why it has not collapsed yet, and that worries me... I had the same feeling about the housing bubble; I didn't understand why it kept going. Then 2 years later, just as I thought it'd probably continue like this forever, it collapsed big time. Apple stock is a good hedge against a USD crisis. They have most of their money outside the US, 65% of revenue outside the US, and manufacturing outside the US. If the US gets hit by a currency crisis, they're in good shape.

[Chicog]

If I was them, I would make the old iPhones a bit more attractive though - change something to make them fresher.

They do. They put the latest, spiffiest iOS 6 on them. And bugger up the maps.

Oops.

[lomatopo]

If I was them, I would make the old iPhones a bit more attractive though - change something to make them fresher.

They do. They put the latest, spiffiest iOS 6 on them. And bugger up the maps.

Oops.

Yes, stop moving my foot so I can shoot it.

Maybe he was referring to a "price reduction"? Not sure what else you could do to make the old, tiny phone more attractive?

[thrilled]

I bought Apple shares at $219.I don't see any problems.Plus they pay A dividend.