Tim Cook Congratulates Apple Employees on Record Quarter, Announces Town Hall Meeting Today

[j.dstasio]

High profits, but missed industry sales estimates and a fall in stock price??? Hmmm. Kind of sounds like a cheaper iPhone would do the trick. Ha ha ha. I really hope that doesn't happen.

Congrats to Apple on the record profits though. And good of Tim Cook to offer his congrats to Apple employees.

[iGrip]

Originally Posted by HenryDJP

I really don't understand why the stocks have dropped so dramatically if Apple reported a record breaking quarter?

Because the former price was based upon the assumption that AAPL would growing quickly.

[HobeSoundDarryl]

Originally Posted by Ryth

I understand their definition of growth. It's just not logical. If a person is a repeat customer of a new model, many people feel that should be considered 'growth' because it's not the same model. And I believe that is the correct way to classify tech..especially mobile tech.

That's fine but repeat business without raising prices is just the same revenues next year that were made this year. In the 100% scenario, if we all buy iPhone 6 at an average price of $600 to Apple (via subsidy) and we all buy iPhone 7 at an average price of $600 to Apple, there's not annual growth there. It's just the same results.

I can invest in that company but if lots of other investors don't believe it can grow a lot more than just repeat business, they won't jump in, pump up the price and thus let me make more than I could make by investing in some other company where investors perceive higher, faster growth potentials.

Again, over this same timeframe that APPL has fallen from $700 to about $460, FB has risen from about $18 to about $30. One stock is perceptually falling fast an another is nearing a double. If I'm not married to all things Apple such that I can be objective about potential, I might be more interested in a stock that is showing strong growth over this period rather than one taking such a huge fall. Does that make Facebook a better company than Apple? Not at all. But, investors who could have gone either way a few months ago are probably much happier if they invested in FB rather than AAPL right now.

Home prices have taken a huge fall all over the country. Are you buying up homes? Why not? Maybe waiting for a bottom? Investors looking at AAPL are maybe doing the same. Or maybe they just want to cash out and try to jump on the next big stock potential.

And I read the Apple loyalty-at-all-costs mentality in many of these threads. "The analysts did this" (not Apple not blowing out revenue projections). "Stupid stock market is rigged" (but no complaints when Apple rose from <$100 to $700). And on and on. To me, these read just like "patent system is stupid" when it works against Apple and "patent system is important" when it works for Apple... and the thousand other "fair weather" scenarios that go on here all the time.

[53x12]

Originally Posted by HenryDJP

I really don't understand why the stocks have dropped so dramatically if Apple reported a record breaking quarter?

Eventually everything has to come to an end. Can't expect infinite growth. Eventually the market gets saturated.

[smoledman]

Apple has plateaued in their profits, that's why investors are selling off. They only care about exponential growth.

[ifij775]

Originally Posted by Oletros

Well, Apple spending on crappy companies has brought Siri and Apple Maps

I consider Siri to be a success that Samsung, Google, and Amazon are copying.

[Rogifan]

Originally Posted by iGrip

Can you say "desperation"? How about "fear of losing key employees"?

I'll bet 100% most CEO's send out memos to their employees after earnings release. I work for a Fortune 50 company and we get one every quarter along with separate emails from division heads. I'm not sure why people think this is odd or desperate for a CEO to recognize the good work their employees are doing. It's just with most companies these memos don't get leaked on the Internet.

[KnightWRX]

Originally Posted by Rogifan

I'll bet 100% most CEO's send out memos to their employees after earnings release.

I just get a .PPT with the results by an anonymous "Memo Mailbox".

But we get a broadcast voicemail for Christmas.

[ifij775]

Originally Posted by Rogifan

Investors are eating up Amazon though they've been waiting forever for these phantom profits. When it comes to tech stocks I don't see much that's rational out there. Do Apple's results really warrant an 11% drop in the stock especially considering its been on a downward trajectory basically since September? Did anything came out yesterday that wasn't already priced into the stock? Seems to me it's panic overselling not based on rational thought but based on emotion. Or people just like kicking someone when they're down.

A year of product refreshes led to decent revenue increase but shrinking margins in what is usually their best quarter. Analysts expect more of this UNLESS Apple offers up some new products (hardware or software) that can change that story. Apple is being tightlipped about those, and for all the analysts know they may be flops.

I think the stock price represents this scenario. You buy if you are optimistic and sell if pessimistic about what is next...

[53x12]

Originally Posted by ifij775

I consider Siri to be a success that Samsung, Google, and Amazon are copying.

Wasn't Google Voice Search out before Siri when you consider its integration into Google Chrome?

From my experience with both Siri and Google Voice, Google blows Siri away. Faster, more languages supported, easier to use, more accurate...etc.

[Rogifan]

Originally Posted by HobeSoundDarryl

Amazon is an entirely different proposition. What makes up the bulk of Apple revenues? You can name the handful of products. What makes up the bulk of Amazon revenues? You would have to talk in broad categories or you'll be talking a very long time. Amazon can't feel much pain if any single product they sell would be significantly harmed by new competition. For example, a Samsung-like competitor could easily publish a better book (but Amazon sells millions of different books), or they could publish a Kindle-like tablet, but Amazon doesn't really even need Kindle, etc. More simply, Amazon's product mix is ridiculously diversified compared to Apple who's "biggest company in the world" revenues might be seen as hanging on just 2 product lines (iDevices & Mac).

Is there panic overselling on AAPL? Sure. Hype & hope are a big part of a stock's price. When hype & hope thin, people exit. As people sell, others reach their price threshold and they sell. And down it goes. This has happened over and over with countless stocks over even the last decade. It's not the world saying Apple is bad, Apple products are bad, Samsung is better, iPhones are crap, or anything like that.

Some AAPL investors are just saying, "been a great ride to here, I'm stepping out now." With stocks, there's plenty of fish in the sea. People can cash out of a long-term high flyer and into what they hope will be the next high flyer. Should Apple roll out some new goodies that starts blowing out records again, they'll cash out of other stocks and come back into AAPL.

I think too many of us are seeing AAPL stock like we see Apple products and we're applying brand loyalty to it as if falling AAPL stock is people calling our precious iDevices bad or something like that. Not the case at all. In fact, it's very simple. Even at this level, AAPL will need to run to about $930/share to generate a double. That means they have to beat an all time record by more than $200. There's plenty of other stocks that could double by rising only $10 or $30. To investors, it can look easier to double their money on other stocks than to double their money on AAPL over the short-term.

Is AAPL a bad investment right now? Only if you bought higher than this and it keeps falling while you keep holding onto it. Is it a bad buy right now? Only if you buy it and it falls while you hold it. Looking at AAPL as some kind of proxy of whether Apple products are good or bad is misplaced loyalty. A stock is just a stock. There's lots of others in which to invest that don't need to rise $460 to yield a double.

Thanks for taking the time to write up this reasoned and measured response.
Though I still think Amazon is overvalued especially with a PE over 3,000 but obviously Wall Street doesn't agree with me.

----------

Originally Posted by ifij775

A year of product refreshes led to decent revenue increase but shrinking margins in what is usually their best quarter. Analysts expect more of this UNLESS Apple offers up some new products (hardware or software) that can change that story. Apple is being tightlipped about those, and for all the analysts know they may be flops.

I think the stock price represents this scenario. You buy if you are optimistic and sell if pessimistic about what is next...

Ok ill ask again, wouldn't some of that already be priced in to the stock? I mean its not like the stock has been on a tear lately. It's basically been down since September.

----------

Originally Posted by KnightWRX

I just get a .PPT with the results by an anonymous "Memo Mailbox".

But we get a broadcast voicemail for Christmas.

I get a voice recorded message from our CEO.

[flux73]

Originally Posted by HobeSoundDarryl

Amazon is an entirely different proposition. What makes up the bulk of Apple revenues? You can name the handful of products. What makes up the bulk of Amazon revenues? You would have to talk in broad categories or you'll be talking a very long time. Amazon can't feel much pain if any single product they sell would be significantly harmed by new competition. For example, a Samsung-like competitor could easily publish a better book (but Amazon sells millions of different books), or they could publish a Kindle-like tablet, but Amazon doesn't really even need Kindle, etc. More simply, Amazon's product mix is ridiculously diversified compared to Apple who's "biggest company in the world" revenues might be seen as hanging on just 2 product lines (iDevices & Mac).

Is there panic overselling on AAPL? Sure. Hype & hope are a big part of a stock's price. When hype & hope thin, people exit. As people sell, others reach their price threshold and they sell. And down it goes. This has happened over and over with countless stocks over even the last decade. It's not the world saying Apple is bad, Apple products are bad, Samsung is better, iPhones are crap, or anything like that.

Some AAPL investors are just saying, "been a great ride to here, I'm stepping out now." With stocks, there's plenty of fish in the sea. People can cash out of a long-term high flyer and into what they hope will be the next high flyer. Should Apple roll out some new goodies that starts blowing out records again, they'll cash out of other stocks and come back into AAPL.

I think too many of us are seeing AAPL stock like we see Apple products and we're applying brand loyalty to it as if falling AAPL stock is people calling our precious iDevices bad or something like that. Not the case at all. In fact, it's very simple. Even at this level, AAPL will need to run to about $930/share to generate a double. That means they have to beat an all time record by more than $200. There's plenty of other stocks that could double by rising only $10 or $30. To investors, it can look easier to double their money on other stocks than to double their money on AAPL over the short-term.

Is AAPL a bad investment right now? Only if you bought higher than this and it keeps falling while you keep holding onto it. Is it a bad buy right now? Only if you buy it and it falls while you hold it. Looking at AAPL as some kind of proxy of whether Apple products are good or bad is misplaced loyalty. A stock is just a stock. There's lots of others in which to invest that don't need to rise $460 to yield a double.

That's a reasonable view. Currently, I'm still up overall by 70% with my position in AAPL, but I'm trying to objectively assess how much lower it *could* go. The price drop hasn't made much sense to me, but as long as I'm up, I can take the hit, esp since they pay dividends. From my viewpoint, I don't see how it can go much lower. It's priced well below other tech companies like MSFT and IBM with better growth prospects. In a word - China. I think as they finalize deals with T-mobile and China Mobile, this downward trend will reverse.

[53x12]

Originally Posted by flux73

It's priced well below other tech companies like MSFT and IBM with better growth prospects.

What do you mean by APPL being priced below MSFT or IBM?

[tdream]

Originally Posted by SmileyBlast!

So you really think that Apple isn't doing anything new an innovative in their R&D dept. with all those billions of dollars at their disposal.

They still have all of the Top Talent that produces the iProducts that are selling by the 10's of millions every Quarter.

The industry has been copying Apple Since 1976. It will continue to do so for the next decade at least. It's just kind of iObvious.

Im saying this is a pep rally when the folks at wall street arent buying their story but you clearly do and you are smarter than those folks in wall street. That much is iobvious.

If you havent noticed a lot of folks are leaving apple, Cook probably told them everything is great too until the door was shown. I wonder how long until Tim is shown the door.

[SeattleMoose]

Analysts drive stock price, not performance.

"I'm sorry, I don't care how good your sales were, THEY ARE'NT GOOD ENOUGH FOR ME!!"...so I'M SELLING AND TELLING ALL MY FRIENDS TO SELL...SO THERE!!

What a sad, sad thing the market has become.

If analysts destroy Apple by making them into a pariah (and yes, perception by itself can steer the herd), then who are Google/SamSung going to copy?

[HobeSoundDarryl]

Originally Posted by flux73

That's a reasonable view. Currently, I'm still up overall by 70% with my position in AAPL, but I'm trying to objectively assess how much lower it *could* go. The price drop hasn't made much sense to me, but as long as I'm up, I can take the hit, esp since they pay dividends. From my viewpoint, I don't see how it can go much lower. It's priced well below other tech companies like MSFT and IBM with better growth prospects. In a word - China. I think as they finalize deals with T-mobile and China Mobile, this downward trend will reverse.

In your considerations, recognize how much you can make per share for dividends vs. how much more it could fall. It doesn't have to fall very far to wash out all you can make in dividends.

If I was you, I would put in a trailing stop right now. A trailing stop will bail you out of AAPL if the stock falls to that level (of the stop). You won't have to think about it. You won't have to hope it pops up a little before you exit. Etc. You'll just get out automatically if it falls down to that level.

If AAPL goes up from here, the trailing stop will rise with it. But it will still be in place should AAPL flop back down again, ready to take you out. A typical trailing stop in place on the ride to $700 would have had most people out at around $630-$650 per share. Those flying naked (no downside protection) are always in the "I hope it gets better", "I can't take the loss now", "What if I get out and it runs back up to $700?" paralysis.

All those guys calling this a fantastic buying opportunity, "this is the bottom", it just can't possibly go much lower than this" and so on should be both buying right now and putting in trailing stops a little below this "bottom". If they know what they are talking about, the stop won't be triggered and they will make whatever rise of AAPL is to follow. On the other hand, if they are wrong, they won't have to suffer the further fall much below where they lock in that stop.

70% is a HUGE profit for a stock trader. Consider taking it and actually booking that profit. Hang on hoping for more might yield more... or it might erode it to 50% or 30% or less. There's no profit from investing until one sells and actually books the profit.

----------

Originally Posted by SeattleMoose

If analysts destroy Apple by making them into a pariah (and yes, perception by itself can steer the herd), then who are Google/SamSung going to copy?

There's a floor. AAPL can't go below a certain level because they have very tangible assets (names a huge wad of cash). AAPL can't be "destroyed" by AAPL falling to- say- $100 or $50 because Apple doesn't need shareholder cash to run its business. Best I know, Apple is interested in buying AAPL stock, not selling more of it to the public. They don't need AAPL at $700 or $50 or $3,000 to be more successful as a company.

If the conspiracy is on to drive AAPL down to some ridiculously cheap price, it's only because those behind the conspiracy are making money on the fall (put option, short sales, etc). And if you actually believe in such conspiracy, then they'll eventually run out of suckers to take the other side of the bearish bet (where they can't make money on a falling AAPL anymore) so they'll then flex their muscles to swing it to the bull side and ride it back up again.

There is no Apple doom in AAPL falling much further from here. In many ways the fortunes of Apple and AAPL are fairly disconnected. Only us shareholders feel "doom" if we are holding a bunch of stock purchased at prices much higher than what they are worth right now. Our profit or losses isn't even a blip on Apple fortune potentials.

[53x12]

Originally Posted by SeattleMoose

Analysts drive stock price, not performance.

"I'm sorry, I don't care how good your sales were, THEY ARE'NT GOOD ENOUGH FOR ME!!"...so I'M SELLING AND TELLING ALL MY FRIENDS TO SELL...SO THERE!!

What a sad, sad thing the market has become.

If analysts destroy Apple by making them into a pariah (and yes, perception by itself can steer the herd), then who are Google/SamSung going to copy?

Apple can't fall down to zero. Especially not when they are making profits and have a huge cash reserve to sit on. However, stock prices are based off of speculation and "gambling." So if some stock brokers aren't happy with the forecast of APPL's potential earnings, let them sell off.

[flux73]

Originally Posted by 53x12

What do you mean by APPL being priced below MSFT or IBM?

Using the P/E ratio as the metric.

[53x12]

Originally Posted by flux73

Using the P/E ratio as the metric.

Thanks for the clarification.

[Newton70]

"Hey, team....thank you all for coming here today to hear about our incredible quarter. What Apple has achieved today is unprecedented, a feat no other company has come close to meeting, it's truly magical. Apple is the first company in the history of Business to ever lose over $200,000,000,000 in market cap in a mere 3 month time. Yes, impressive isn't it?" [applause]

[cappadonna]

Originally Posted by blue rocket

Here's the sad truth about Apple:

"Apple Shares Down 11 Percent on Fourth-Most-Profitable Quarter Posted by Any Company Ever"

...the 4th most profitable quarter posted by any company, in the history of time... and it's still not impressive enough.

No matter what Apple does, or the new products it may offer in the future, analysts will always come up with a down side or a reason the product is no good. They just expect too much from Apple, they expect things that make no sense. Even when Apple proves them wrong and sells 100 million of whatever new product they announce -- it's still not good enough. They did this exact same thing when the iPad was announced. Stock went down, people said it wasn't impressive, nobody would buy it -- look at it now, look at the tablet market now... all of that was 100% because of Apple no matter how you try to look at it.

The stock is tough to own because the reasons why it goes up and down are honestly total BS.

I said this the other day as well. I love AAPL and I hate AAPL. Love it cuz of the money it's made me, hate it cuz of how easy it is to incite a mass sell off of the stock! They'll rebound, I have no doubt, but boys you better be ready for the long because it's gonna be a while lol

[flux73]

Originally Posted by HobeSoundDarryl

In your considerations, recognize how much you can make per share for dividends vs. how much more it could fall. It doesn't have to fall very far to wash out all you can make in dividends.

If I was you, I would put in a trailing stop right now. A trailing stop will bail you out of AAPL if the stock falls to that level (of the stop). You won't have to think about it. You won't have to hope it pops up a little before you exit. Etc. You'll just get out automatically if it falls down to that level.

If AAPL goes up from here, the trailing stop will rise with it. But it will still be in place should AAPL flop back down again, ready to take you out. A typical trailing stop in place on the ride to $700 would have had most people out at around $630-$650 per share. Those flying naked (no downside protection) are always in the "I hope it gets better", "I can't take the loss now", "What if I get out and it runs back up to $700?" paralysis.

All those guys calling this a fantastic buying opportunity, "this is the bottom", it just can't possibly go much lower than this" and so on should be both buying right now and putting in trailing stops a little below this "bottom". If they know what they are talking about, the stop won't be triggered and they will make whatever rise of AAPL is to follow. On the other hand, if they are wrong, they won't have to suffer the further fall much below where they lock in that stop.

70% is a HUGE profit for a stock trader. Consider taking it and actually booking that profit. Hang on hoping for more might yield more... or it might erode it to 50% or 30% or less. There's no profit from investing until one sells and actually books the profit.[COLOR="#808080"]

All true, but I take a long term view when it comes to investing. And as far as I'm concerned, no other company has better long term prospects than Apple. And if the price keeps falling, it just means that my dividend, which are set to reinvest, can simply buy more shares. And if my long term view is correct, I get rewarded for sticking with it. My main problem with ditching right now is, why? There's bound to be a rebound once all the hoopla dies down. And when the deals that we know are coming, are finally announced, there will be a move back up. And even if they only maintain 10-15% growth per year with a P/E ratio of 10, I have no problem with that. There's always a risk. But at it's current P/E ratio, I don't see any other company that carries less risk.

The price doesn't make sense, but what I believe is that with good companies, prices eventually "normalize". I might think differently if AAPL's revenues or profits were shrinking but they're not (once you adjust the quarter for number of weeks).

[neonmd]

Originally Posted by HenryDJP

I really don't understand why the stocks have dropped so dramatically if Apple reported a record breaking quarter?

I read once and have come to believe that the market can stay irrational longer then you can stay solvent. There is no use arguing with it. Look at NFLX yesterday. Once over $300 then crushed now rebounding >40% in a day. How much different is there bottom line really over that time?
Markets trade on potential and future not present it seems. Apple makes awesome things I use everyday. I look forward to upgrading some of them. But how many can they sell? How many can they reach?
Continued % changes over previous % changes become impossible to continue mathematically. They are ridiculous really. When they stop though, market makers sell.

[saturn88]

Originally Posted by HobeSoundDarryl

If I was you, I would put in a trailing stop right now. A trailing stop will bail you out of AAPL if the stock falls to that level (of the stop). You won't have to think about it. You won't have to hope it pops up a little before you exit. Etc. You'll just get out automatically if it falls down to that level.

If AAPL goes up from here, the trailing stop will rise with it. But it will still be in place should AAPL flop back down again, ready to take you out. A typical trailing stop in place on the ride to $700 would have had most people out at around $630-$650 per share. Those flying naked (no downside protection) are always in the "I hope it gets better", "I can't take the loss now", "What if I get out and it runs back up to $700?" paralysis.

I usually use Parabolic SAR indicator to set a trailing stop. You are right, AAPL broke the stop at ~$650. Weekly chart:



If you still have not sold it at $450, it might be too late to sell. The stock is probably at its year's low. It still has to test highs. Yearly chart:

[thelookingglass]

Originally Posted by saturn88

Apple is lazy and arrogant. New iPhone every 2 years? What a joke.

With 150 billion in cash they should be much more aggressive: innovate, expand product line, deliver faster updates, buy hot companies, get into new markets and services.

A lot companies would kill to get some cash to invest in their businesses: Apple has all the resources to invest into their own business, but instead money stay in Chinese banks.

These comments are just hilarious. Have you ever managed a cutting edge multibillion dollar tech company? Do you know how many variables are involved in "innovation" (putting aside your curt and unwarranted dismissal of what Apple's done in the last few years as a lack of innovation)? Are you aware that Apple can't work magic and that sometimes their pace of innovation is limited by what OTHER component makers have the ability to make?

Would you rather they put out slightly less stellar products and give you a completely new, re-designed iPhone every year with basically the same innards? How about every six months?