Apple Reports Q4 2013 Year-End Results: $7.5 Billion Profit on $37.5 Billion in Revenue [Call Concluded]

[Woyzeck]

Hmm. I was under the impression that investors invested to make money, not market share.

It works as follows:

1. Buy stock at price A
2. Sell stock at price B

If B is higher than your WACC then you win. If you can find higher B-A elsewhere, then it was a bad investment. And A is quite high for AAPL, so B should be - well - even higher.

Investors don't care about Apples's revenues. They care about their future stock price.

 

[Danyboy]

Stock is down because there's no growth or predicted growth. How hard is that to understand.

It's hard to understand when you own the stock and you are scared that you will lose money if AAPL is not growing.

 

[IJ Reilly]

Share price is now up 1% in AH.

Don't stare into the hairy eyeball. It will make you insane.

 

[nconnella]

...

 

[giantfan1224]

Investors don't care about Apples's revenues. They care about their future stock price.

Since metrics like revenue tend to translate into higher or lower stock prices, I would wholeheartedly disagree.

 

[Danyboy]

Hmm. I was under the impression that investors invested to make money, not market share.

Actually the TRUE investors, those who have the power to move the stock price care a lot about market share! Only the so called "investors" who post on this blog think that investing is about making money right now.

 

[BaldiMac]

It works as follows:

1. Buy stock at price A
2. Sell stock at price B

If B is higher than your WACC then you win. If you can find higher B-A elsewhere, then it was a bad investment. And A is quite high for AAPL, so B should be - well - even higher.

Investors don't care about Apples's revenues. They care about their future stock price.

Talk about shifting goalposts! What does that have to do with your original point that I responded to? The one that was demonstrably incorrect.

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Actually the TRUE investors, those who have the power to move the stock price care a lot about market share! Only the so called "investors" who post on this blog think that investing is about making money right now.

If only it was so simple.

 

[Woyzeck]

So Macintosh sales are not only behind iphone sales, but ipad sales as well.
It really is kind of scary. I hope the bean counters don't try and make a case for ending the Mac.

I think we already see this. Apple doesn't invest in its desktop/notebook line any more. Thus I don't see the rationale behind the new Mac Pro. It's a super-super-niche product that won't sale well (the previous model didn't sell, too).

 

[TouchMint.com]

iTunes Store sales keep raising interesting there.

 

[OC40]

Exactly - I don't want to fool with digging my phone out of my pocket every time I hop in the car to play tunes (my car doesn't have BT).

I have BT, but I prefer seeing the album art on my screen (does not show with BT). Plus, I'm lazy and, like you, I do not want to fumble with my phone everyte that I get in the car.

 

[rMBP2013]

"Apple's guidance for the first quarter of fiscal 2014 includes expected revenue of $55-58 billion"

Is that normal for a holiday quarter ?

For Oct, Nov, and Dec.? You bet.

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Why are iPod sales so low nowadays.

It's rendered useless by the iPhones and to a lesser degree, iPads.

 

[Woyzeck]

Since metrics like revenue tend to translate into higher or lower stock prices, I would wholeheartedly disagree.

Of course the projected revenues influence the stock price. But it's the share price that investors care about, because they don't buy revenues.

 

[lilo777]

So, Apple made $7.5 billion vs Samsung's $9.6 billion this quarter. Yet Apple has 2x market capitalization. This ratio probably will not last long. It'll be resolved one way or another (most likely AAPL going lower and Samsung going higher)

 

[rMBP2013]

wow iPhone is 50%+ of Apple profit.

Umm, that's revenue. Not profit.

Though I'd love to see their gross margins for each of their categories!

I'm certain iPhones have the highest margins, followed by Macs.

 

[scbn]

Apple reports good numbers. Stock initially down...then recovered.

Deferred revenue from free software on iOS devices and Mac sales. That's why the forecast was weaker than some had expected.

 

[rMBP2013]

So, Apple made $7.5 billion vs Samsung's $9.6 billion this quarter. Yet Apple has 2x market capitalization. This ratio probably will not last long. It'll be resolved one way or another (most likely AAPL going lower and Samsung going higher)

Samsung made $6.76B in profits.

http://www.samsung.com/us/aboutsams...ion/downloads/2013/2013_con_quarter02_soi.pdf

 

[Woyzeck]

"Sales of Macs exceeded expectations. Down 4% YoY, but PC market was down 10%. Macs gained share 29 of last 30 quarters."

I can't answer that because I'm unable to find reliable figures on the desktop/notebook market (excluding tablets). My impression was that other companies like Lenovo are doing much better with desktops/notebooks (while Dell/HP are in a steady decline).

Even if they outperform the market the numbers are shrinking, so it's not a promising investment here.

 

[BaldiMac]

So, Apple made $7.5 billion vs Samsung's $9.6 billion this quarter. Yet Apple has 2x market capitalization. This ratio probably will not last long. It'll be resolved one way or another (most likely AAPL going lower and Samsung going higher)

You are comparing Apple's net profit to Samsung's operating profit.

Samsung made $6.76B in profits.

http://www.samsung.com/us/aboutsams...ion/downloads/2013/2013_con_quarter02_soi.pdf

EDIT: That was last quarter.

 

[giantfan1224]

Of course the projected revenues influence the stock price. But it's the share price that investors care about, because they don't buy revenues.

So investors aren't smart enough to look beyond the second-to-second price movement to understand why stock prices move?

 

[lilo777]

Samsung made $6.76B in profits.

http://www.samsung.com/us/aboutsams...ion/downloads/2013/2013_con_quarter02_soi.pdf

OK, that's a little bit confusing. I used a number from here. $9.6B is "operating profit". And according to Bloomber: Net income, excluding minority interest, rose 25 percent to 8.05 trillion won ($7.6 billion)

Whichever number if the right one for comparison, 2x still looks unsustainable.

 

[BaldiMac]

I can't answer that because I'm unable to find reliable figures on the desktop/notebook market (excluding tablets). My impression was that other companies like Lenovo are doing much better with desktops/notebooks (while Dell/HP are in a steady decline).

It was just said during the conference call. See the original post.

Even if they outperform the market the numbers are shrinking, so it's not a promising investment here.

Again, you are shifting the goalposts. I only questioned your statements that Mac market share was shrinking and that Apple had "lost" in the PC market.

 

[r3m1]

So even with the release of two new devices (5C and 5S) they could not maintain profit levels.

 

[IJ Reilly]

Actually the TRUE investors, those who have the power to move the stock price care a lot about market share! Only the so called "investors" who post on this blog think that investing is about making money right now.

No, they care about earnings and the growth thereof. This is all any investor should care about. Anyone who invests without the goal of making money should stuff theirs in a mattress.

 

[yow.]

What makes you think so? I can't imagine it has higher margins than the iPhone.

I see what you mean: they still have to pay for the music/video, so most of the reported revenue is paid out. I forgot about that.

But, as a business, there's very little for Apple has to do to run iTunes. You could close down most of Apple, and still run it.

I also mentioned R&D in my comment (for iOS devices, not iTunes). Consider also the risk involved in R&D. iTunes is more like the kind of business Warren Buffett likes.

 

[Frisco]

why would anyone buy an ipod?

I am still using the original iPod 5 GB--no need to replace it and it has a moveable scroll wheel.