Apple Reports Record March Quarter Results of $13.6B Profit on $58B Revenue, Boosts Dividend and Buybacks

[Rogifan]

What doesn't make sense to you? The markets in general are down to start with, the earnings report moreso than ever illustrated that they are the iPhone company and there will be a lot of risk to the stock if they should miss on iPhone sales, the stock has already doubled in a year, many people are taking profits. Makes lots of sense to me.

They need a new, large category (not watch), with lots of growth potential. Otherwise they will be continuing their transition from Growth stock to Stalwart stock. It's the cycle of business life.

What? Apple has been an "iPhone company" for quite a while now. If that was really spooking Wall Street how is it that the stock closed yesterday near an all time high?

Facts are they beat on the top and bottom line, beat on gross margins and EPS, and provided strong guidance for next quarter. Tim Cook said only 20% of install base has upgraded to the iPhone 6 and said they're seeing more switchers than ever before. In what universe does that equate to the stock being down the next day? Google missed on the top and bottom line and was up 3%. Where is their growth potential?

 

[cheesyappleuser]

But notice that for the first time in a long time, Macs are a larger percentage of their sales than iPads. That's pretty amazing.

It is actually the second time; the first was on Q4 2014. But I won't be surprised to see this as a trend.

 

[TallManNY]

Apple reports record setting numbers and huge year over year growth. Cook basically lays out that Apple is working on tons of stuff and that the Watch is great. Huge confident stock buy backs announced. Dividend increased a bit.

Stock drops next day.

Yep, makes sense to me.

Now if the market was expecting more than what was announced yesterday, how did the market get that opinion when analysts missed big time. Apple beat handily the optimistic "independent/amateur" analysts as well.

I wasn't expecting a pop over yesterday's near 2% increase. But I wasn't expecting to hand it back after such a great earnings release.

Market is weird. That is all I have to say.

 

[jnpy!$4g3cwk]

Hmm...

What are Apple 'services'? Does that include their online 'services'?

iPads and Services making up the same %. Oh my how quickly the market can change.

I have the same question. Is this Apple's percentage on iTunes and app sales, or, does it include other services like professional services, AppleCare, or, what?

 

[finnns2000]

Personally I feel the replacement cycle of the watch will mirror the iPad and not the iPhone. You have a lot of people spending between $500-1000 for the watch once the band is included... Are they going to upgrade that every year or two? I doubt it.

We'll see, but I just don't see the watch becoming the next iPhone. Just like the iPad it will take time to see what happens.

Sure it's a wait and see game, but don't write it off yet. I already plan on buying v2.0, give it a little more RAM and a better battery and it's perfect.

Btw, some collect watches, will want 2-3, few need more than 1 tablet. Especially something that enhances your iPhone experience.

 

[Eumaeus]

Without the iPhone, how "doomed" would Apple be? Fortunately, we have numbers…

The "disappointing" iPad business, alone, would be in the Fortune 200, with annualized revenues equivalent to Nike, Kraft Foods, or Xerox.

iPad + Mac, exclusive of everything else, generate revenues equivalent to everything Google makes.

Not very doomed.

 

[pethead]

I've not read all the threads here so excuse me if this has been mentioned in part.

With all the chatter around the iPad sales retreating, Ive not seen anyone bring up the well known 'Halo Effect'.

It's been established that growth in iPhone sales can be partly attributed to China and the introduction of the 6 & 6+

Yet nowhere have I seen any commentary that some of these 10's Millions of new iOS users will also acquire an iPad in the future. Strange IMHO.

Personally I had tried various other tablets and then pulled the trigger on an iPad2. I followed that with an ATV, AirPrint Printer, iPod Touch, iPhone 4, Mac Mini (2012), iPhone 5, iPad Air, iPhone 5s, Apple Watch.

Add to that I've influenced half a dozen iPads, iPhones, ATV's purchases.

Once customers understand the retained value of Apple Products (the Mac Mini 2012 is worth like 80%+ of its original cost 3 yrs in), see the support that lasts for yrs (iPad2 still officially supported with updates), get past the removable battery nonsense, most like me flock to Apple Products. The cost of any item has to factor in its usable life, support and value at the end when you sell it or gift it away.

So for iPad ongoing numbers I expect some big jumps in sales as the millions realize the value in Continuity, Handoff etc.

That's perhaps 3 cents more then needed. Meh

 

[vvswarup]

ONE trick ponies are never good, for corporations, in the long-run - all it takes is one miss of the flagship product and the market gets a little scrambly.

Tell that to Google. More than 90% of revenue comes from advertising. They seem to be doing fine. The market has consistently given Google a high P/E multiple in spite of being shamelessly shareholder unfriendly and taking pride in spending money like there's no tomorrow.

 

[cube]

Mac going down quite hard. This is obvious when your products truly become toys and the company is more interested in celebrity than professional tools.

I now regularly look at mobile workstations. Sooner or later, I will have to bite the bullet.

 

[GfPQqmcRKUvP]

I would argue apple would earn more with that money then 99.9999% of the shareholders would.

You are, of course, wrong. The cash on their balance sheet above working capital has literally been unused and earned close to nothing for years. In fact, if they had distributed their cash (and thus reduced their asset base), their ROA would be much higher and investors could have used that cash to invest in other productive assets.

I have no problem with them having a good amount of cash so they can buy pretty much whatever they'd like should the opportunity arise, but ~$150b is comical.

 

[69650]

In addition to the increase in the dividend payment, Apple said it will once again expand its share repurchase authorization to $140 billion from $90 billion and the company says it expects to spend over $200 billion in cash under its capital return program by the end of March 2017. Since the start of its capital return program in August 2012, Apple has returned over $112 billion to shareholders, including $80 billion in share buybacks.

Disgraceful waste of money. Just imagine what they could do with $200Bn. How many lives they could transform instead of simply rewarding wealth and greed.

 

[GfPQqmcRKUvP]

Disgraceful waste of money. Just imagine what they could do with $200Bn. How many lives they could transform instead of simply rewarding wealth and greed.

Just FYI, it's not ultimately Apple's money. It's the shareholders'. If those shareholders would like to sell their Apple stock (which is worth more due to the success of the company and the cash it generates) and give their profits to charity then they are free to do so. You making uninformed, populist pleas will get your nowhere, however.

 

[Rogifan]

Apple reports record setting numbers and huge year over year growth. Cook basically lays out that Apple is working on tons of stuff and that the Watch is great. Huge confident stock buy backs announced. Dividend increased a bit.

Stock drops next day.

Yep, makes sense to me.

Now if the market was expecting more than what was announced yesterday, how did the market get that opinion when analysts missed big time. Apple beat handily the optimistic "independent/amateur" analysts as well.

I wasn't expecting a pop over yesterday's near 2% increase. But I wasn't expecting to hand it back after such a great earnings release.

Market is weird. That is all I have to say.

Even Uncle Carl Icahn tweeting that Apple was misunderstood and AAPL was undervalued couldn't move the stock. Down 1% when the overall market is flat to up. Makes zero sense.

----------

Mac going down quite hard. This is obvious when your products truly become toys and the company is more interested in celebrity than professional tools.

I now regularly look at mobile workstations. Sooner or later, I will have to bite the bullet.

Mac going down hard? What are you talking about? YOY change is up 10%.

 

[Carnegie]

I have the same question. Is this Apple's percentage on iTunes and app sales, or, does it include other services like professional services, AppleCare, or, what?

It's their revenue from all the content stores (iTunes, iBooks, the App Stores) plus Apple Pay, AppleCare, and other services such as maintenance services.

 

[cube]

Mac going down hard? What are you talking about? YOY change is up 10%.

I see a very poor quarterly delta in the graph.

And when people gloat about revenue, it's because profits suck.

 

[Keirasplace]

What doesn't make sense to you? The markets in general are down to start with, the earnings report moreso than ever illustrated that they are the iPhone company and there will be a lot of risk to the stock if they should miss on iPhone sales, the stock has already doubled in a year, many people are taking profits. Makes lots of sense to me.

They need a new, large category (not watch), with lots of growth potential. Otherwise they will be continuing their transition from Growth stock to Stalwart stock. It's the cycle of business life.

So, a revenue and profit growth of 50% yoy is not enough? Seriously, for a firm with 200B in revenues! Bet, you're one of those people two years ago who dumped Apple stocks (obviously because it was doomed...) and consequently lost 50% in upside since then; you're repeating EXACTLY the same words people were saying then.

95% of tech companies have done worse than Apple in the last 3 years in all financial metrics that count. Maybe it is time those other companies commit ritual suicide since their "new stuff" and "new products" aren't working so well....

Funny how companies with crap eternal bottom lines like Amazon are not held under the same withering spotlight.

 

[Keirasplace]

Personally I feel the replacement cycle of the watch will mirror the iPad and not the iPhone. You have a lot of people spending between $500-1000 for the watch once the band is included... Are they going to upgrade that every year or two? I doubt it.

We'll see, but I just don't see the watch becoming the next iPhone. Just like the iPad it will take time to see what happens.

That's only an "issue" if 90M next year and buy a watch and they saturate the market quickly. I think that they won't hit 100M watches until year 4, saturation by year 6-7.

Those watches will trickle down to other people (people won't put them in their drawers like old phones), so they will tend to sit in the market a long time; apple doesn't care that much because people with an Apple watch will tend to also buy other Apple products. Apple doesn't think of each product as something separate. They add to the whole value of every other product they sell.

I'd argue that there is a good chance nobody will be able to compete with Apple (except maybe Samsung) in the smart watch market and they have a long period of entrenched profit in the high end. This will help as they introduce other wearables.

 

[Rogifan]

I see a very poor quarterly delta in the graph.

And when people gloat about revenue, it's because profits suck.

Again what the heck are you talking about? No one compares Q/Q results. Of course the holiday quarter would be better than the one following it. And how is $13B+ in profits sucking?

 

[GfPQqmcRKUvP]

So, a revenue and profit growth of 50% yoy is not enough? Seriously, for a firm with 200B in revenues! Bet, you're one of those people two years ago who dumped Apple stocks (obviously because it was doomed...) and consequently lost 50% in upside since then; you're repeating EXACTLY the same words people were saying then.

95% of tech companies have done worse than Apple in the last 3 years in all financial metrics that count. Maybe it is time those other companies commit ritual suicide since their "new stuff" and "new products" aren't working so well....

Funny how companies with crap eternal bottom lines like Amazon are not held under the same withering spotlight.

The arrogance it must take to think your opinion on value is so superior to the aggregate knowledge of the financial markets is astounding. Seriously.

 

[Keirasplace]

The arrogance it must take to think your opinion on value is so superior to the aggregate knowledge of the financial markets is astounding. Seriously.

Considering that same idiot market (and the sycophant choir of dodo analysts) had Apple stock way way lower not long ago, with basically the same info as now, your comment about the market's wisdom is utterly laughable and completely ironic.

Good thing I didn't follow that "wisdom" and dump Apple's stock hey!
Apple has revenue and profit numbers related to its stock price unlike many other tech firms, which are seemingly valued on gut feeling and blue sky future profits.

BTW, I've invested since the 1980s and know too well how the circus called the market "works". Thankfully, I've been a buy and hold on fundamentals kind of gal, which has enabled me to make pretty good money while some other "wise market investors" (sic) have lost their shirts more than once...

 

[69650]

Just FYI, it's not ultimately Apple's money. It's the shareholders'. If those shareholders would like to sell their Apple stock (which is worth more due to the success of the company and the cash it generates) and give their profits to charity then they are free to do so. You making uninformed, populist pleas will get your nowhere, however.

Steve Jobs never once paid out a dividend and he certainly would never have agreed to share buybacks and I admire him for that. You may think that greed is good and if that helps you sleep at night then so be it, but I have a different moral compass.

 

[TallManNY]

Steve Jobs never once paid out a dividend and he certainly would never have agreed to share buybacks and I admire him for that. You may think that greed is good and if that helps you sleep at night then so be it, but I have a different moral compass.

If Apple hadn't done a buyback or dividend, they would be sitting on more than $250 billion in cash now. Do you think that would be a good idea?

 

[sshambles]

I see your confusion, but you're reading it a bit wrong. The gray section alone is iPad, not the gray section plus all of the colors below it. Think of it as a pile of gold (fitting). The gray section is only the gold that was earned by iPad sales. Everything underneath it are not from iPad sales, but the iPad sales gold looks really high because its laying on the rest of the gold.

The iPad's peak hits around $75b, but it starts at around $65b, so it actually only adds about $10b by itself ($12.6 according to the article). iPad total sales do not equal $75b.

Hope that helps a little?

Thanks, it does make sense now.
A little difficult to interpret at first glance, the pie graph does help though.

 

[cube]

Again what the heck are you talking about? No one compares Q/Q results. Of course the holiday quarter would be better than the one following it. And how is $13B+ in profits sucking?

I am comparing the latest delta to the corresponding deltas of previous years. And I am not talking about the total profits or revenue this thread refers to.

 

[thekeyring]

Without the iPhone, how "doomed" would Apple be? Fortunately, we have numbers…

The "disappointing" iPad business, alone, would be in the Fortune 200, with annualized revenues equivalent to Nike, Kraft Foods, or Xerox.

iPad + Mac, exclusive of everything else, generate revenues equivalent to everything Google makes.

Not very doomed.

This is fascinating. When Apple does eventually have that year when profits aren't up from the year before, people will cry doom. It's good to know they could loose ~70% of their profits/revenue (iPhone) and still be as profitable as Google, still churning out Macs, etc.

Though because of their cash pile, they will last for hundreds of years, even if they were losing millions every year. What will be interesting is whether they remain relevant, fresh, still surprise up and be one of the top players in technology.