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Apple Reports Q2 2013 Quarterly Results: $9.5 Billion Profit on $43.6 Billion in Revenue, Increases Dividend and Share Repurchases

wovel said:
So, relative to other companies in the industry, you agree AAPL (your distinction is meaningless, but ok) is very undervalued? Even at $700 AAPL was undervalued relative to other companies in the market (based on real or anticipated growth). Today it is just silly.

I believe you think that shareholder behavior is somehow rational.
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I believe there's a middling that will happen over the coming months (somewhere between $400 and $600) and we'll see a valuation more fitting to a company who's top sellers are entering maturing markets.

That isn't to say there isn't upside though - still plenty of opportunity out there in underdeveloped markets for smartphones and for Apple in the larger smartphone markets.

Also, the iWatch and iTV and advances in television programming (moving from the current cable model to an ala carte style). Much Apple is working on I'd bet, and plenty we don't even know yet.
 
Amazing. Amazon sells the Kindle Fire at break-even or loss and claim they will make it up with the eco-system. Analysts cheer, even as Amazon reports a loss. Apple sells the mini at over a 30% margin and has a real eco-system actual making money and the analysts all act like the world is coming to an end.
 
- 95% loyalty rate among iPhone owners, "substantially higher" than the competition. JD Power ranks iPhone top for 9 years in a row.

9 years? Am I going mad?
 
MikhailT said:
I admit that i'm a complete dumb ass when it comes to the stock market but can somebody clarify what Apple is doing for me?

1. They're going to spend an additional $50B of their own cash to buy back shares.

What exactly would that accomplish for them?

How much of the stocks do Apple already own and/or how much do they have to spend to go private or even semi-private based on the current prices?
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Earnings are on a per-share basis (EPS). A company buys back its own shares in order to keep the number from increasing (shares are being created all the time due to stock grants to execs) and the EPS from falling. A company can't own its own shares. The shares they buy back disappear. To go private, a company would need to repurchase all of the outstanding shares, at a price the existing stockholders will accept. This is what's going on with Dell right now.

2. I keep seeing $100B would be spent through 2015 on buying shares and issuing dividends if I understand correctly.

Does that mean that assuming that Apple does not earn anymore profits (to keep this simple for me), by the end of 2015, Apple would only have $45B in cash and own a bigger share of itself?
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Essentially, though a company doesn't ever own a share of itself. Either it's a public company or a private company. No in between.
 
TallManNY said:
So if a new service comparable to the addition of Siri gets added to 5S, you don't think the 5S will compare nicely to the HTC One?

Do you just need a new skin on the OS? I don't mean that to seem sarcastic, but is that the only way to make the phone look less dated?
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I was stating my opinion. The iPhone 5 is small compared to most other high end phones. It's basic look is the same as the iPhone 4. iOS looks the same, the same rows of the same icons. Stale. Old. Tired looking. Sure it works well, but there is room for updating and features, and looks. Windows XP still works fine, but it is long in the tooth compared to Windows 7. Again, my opinion and no bashing intended.
 
jrswizzle said:
Also, the iWatch and iTV and advances in television programming (moving from the current cable model to an ala carte style). Much Apple is working on I'd bet, and plenty we don't even know yet.
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I will agree with that. The tone of the call sounds like these new products will not show up till the end of this calendar year. Should be an interesting Christmas.
 
AppleScruff1 said:
I was stating my opinion. The iPhone 5 is small compared to most other high end phones. It's basic look is the same as the iPhone 4. iOS looks the same, the same rows of the same icons. Stale. Old. Tired looking. Sure it works well, but there is room for updating and features, and looks. Windows XP still works fine, but it is long in the tooth compared to Windows 7. Again, my opinion and no bashing intended.
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I would expect some changes in iOS7. I could be wrong, but this will be their big story for the summer.
 
wovel said:
Amazing. Amazon sells the Kindle Fire at break-even or loss and claim they will make it up with the eco-system. Analysts cheer, even as Amazon reports a loss. Apple sells the mini at over a 30% margin and has a real eco-system actual making money and the analysts all act like the world is coming to an end.
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They say Wall Street is all about the future. So when you constantly disappoint, sell products at a loss and post one loss after another, I guess Wall Street must think that you can only go up from there. Wall Street's view of Apple seems to be that they have hit the top and it's only down from there. Yet Apple is posting profits, record sales, put another few billions of dollars into the bank, and even after dropping 22% their gross margins are still almost double the industry average.

This just proves how speculatory the investment in Apple has been. $700 per share in September was an unsustainable bubble.
 
MikhailT said:
I admit that i'm a complete dumb ass when it comes to the stock market but can somebody clarify what Apple is doing for me?

1. They're going to spend an additional $50B of their own cash to buy back shares.

What exactly would that accomplish for them?

How much of the stocks do Apple already own and/or how much do they have to spend to go private or even semi-private based on the current prices?

2. I keep seeing $100B would be spent through 2015 on buying shares and issuing dividends if I understand correctly.

Does that mean that assuming that Apple does not earn anymore profits (to keep this simple for me), by the end of 2015, Apple would only have $45B in cash and own a bigger share of itself?
Click to expand...

No. A company doesn't "own itself" that is impossible. The shares eventually have to be owned by a person. Going private doesn't mean a company owns itself, it means another company or person owns the company. That will never happen to Apple as it is too big for any one person or company to own it. Tim Cook and the rest of management aren't rich enough to take Apple private (they aren't even in the same neighborhood as the ballpark that they aren't in). Neither is any hedge fund or private equity fund.

Buying shares back doesn't do anything for the company, but it isn't for the benefit of the company it is for the benefit of the shareholders (which is the purpose of a company). At current marketcap (call it $400B), buying back $50B of the stock would mean buying 1/8th of the company. Those shares would be destroyed and that would mean that each remaining shareholder would own 1/8 more of Apple. So a shareholder would have the right to 1/8th more of the revenue and assets of Apple.

Your answer to 2 is yes that is the cash that would be left. But Apple has said they will borrow (at a rate that is probably below inflation, so a win) to make some of these purchases. So cash pile wouldn't really drop to $45 B.
 
wovel said:
Just means a bunch of people that should not be trading in the after-hours market just lost their shirts.
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I dunno. Any given day, week or even month in the regular market doesn't necessarily mean that much. Trying to find much significance in the after-hours market seems like a recipe for insanity.
 
AZREOSpecialist said:
They say Wall Street is all about the future. So when you constantly disappoint, sell products at a loss and post one loss after another, I guess Wall Street must think that you can only go up from there. Wall Street's view of Apple seems to be that they have hit the top and it's only down from there. Yet Apple is posting profits, record sales, put another few billions of dollars into the bank, and even after dropping 22% their gross margins are still almost double the industry average.

This just proves how speculatory the investment in Apple has been. $700 per share in September was an unsustainable bubble.
Click to expand...

We have seen time and again that you can just keep going down. If Amazon misses later this week, even if they post another loss, the stock will stay within a couple of points of where it is. There is no rationality to investor behavior.
 
Lovely news, after a whole year of bashing apple and seeing doom and gloom in stocks, it's nice to see it all in perspective that they are plenty healthy and are bucking the trend of decline etc.

I think apple are selling to almost the maximum amount of customers available to them as premium products they occupy all areas apart from phablets which I think will come this year along with 5s. They sell two sizes of laptops and iPads, it's time for two sizes of phone as well now to further raise the profit margins and complete the product line up.

What all the haters need to understand is its wasn't jobs or the logo or anything that apple customers like, it's the company and the way it operates, producing only products that the designers want to own. Apple don't just make phones there is an ethos to design that goes all the way through everything they do. Samsung can sell more phones etc all they want, apple have got my business for the foreseeable future and it has nothing to do with price or specs and that kind of brand loyalty cannot be won away easily.
 
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