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Apple Reports Strongest Ever Quarterly Earnings: $13.1 Billion Profit on $57.6 Billion in Revenue in Q1 2014
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Useless quote. The market frequently lies. Just a big shell game. Maybe you should watch the Enron story, or the wolf of Wall Street, or the story about the collapse a few years back.
This is what I don't get about Amazon. The same excuses are used quarter after quarter to explain away no profits. I'd love to know what switch they're going to flip to turn on the profit hose.
I'm no expert when it comes to business and investing, but I do know one basic fact that most people in threads about Apple's stock price seem to miss: the price isn't about the current state of the company or what it sold last quarter. It's about what investors and the market expect in the near future.
Apple's stock value dropping off is not a reflection of what they just announced today. That may be a catalyst for the change but it's more a reflection of what people are expecting in the coming few months.
I confess I don't understand the thinking behind it. You'd think investors would assume that a company that has done great would keep going great and the value would increase. But whatever. That's how it works, I guess.
Apple's stock value dropping off is not a reflection of what they just announced today. That may be a catalyst for the change but it's more a reflection of what people are expecting in the coming few months.
I confess I don't understand the thinking behind it. You'd think investors would assume that a company that has done great would keep going great and the value would increase. But whatever. That's how it works, I guess.
I don't know how many times it has to be said: the value of the company is not Apple's guidance projected out ad infinitum. Apple derives a large amount of revenue from one product line, which didn't sell as much as expected. Current quarters are nowhere near as substantial to the total market value of a company than the discounted sum of future quarters.
If I only knew one ratio, and that ratio was P/E, I'd agree with you. Fortunately I'm aware that there is more to valuation than that. Feel free to bet against Amazon - the internet is filled with people losing money trying to short that company.
I, too, like baseless speculation.
It is deficient in size.
Good.
They absolutely do not. They have a far better idea of how to run a technology company than I do but absolutely no clue what to do with the excess rewards their core competence has produced. They have made around 1% on surplus cash, which has been around for years and years. I, on the other hand, have returned significantly more than 1% investing in other companies that I find attractive. Their cash balance is a significant drag on ROE and is diluting every shareholder's investment in a great tech company.
The scale of $158b (and growing every week) eludes you.
It sounds like you have AAPL stock, so you should care about that.
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When Wall Street over-expects, the price ends up being higher than it should until there is a correction like this. The price NEVER goes up for anything just based on "best quarter ever". It goes up if the company beats expectations, which Apple did not.
If you really think that AAPL is going to go down further, I'd recommend short selling.
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This should be on the top of every quarterly report article on MR. About 5% of us seem to get it.
But it doesn't seem to have hit their profits. Combined with Samsung's less-than-stellar results, it does seem to be a sign that the market itself is reaching a saturation point. However, unlike Samsung, Apple still has some cards left, such as releasing a significantly larger screened phone or a complementary smartwatch.
YEA, This is " A WAR "
Main Street ( Ordinary People ) VS Wall Street ( VILLAIN, DEMON in other Name )
If Villain Goes Too Far, Wall Street BECOMES " BASTILLE " in New York !
But analysts themselves should probably do a better job in getting their expectations right. Ever since changing their guidance strategy (i.e. no longer sandbagging like they did when Jobs was around), Apple has actually done a pretty good job with 3-month forecasts. They didn't provide an iPhone sales estimate, but overall margins and profits were at the high end or higher than Apple's guidance, while revenue was within Apple's range. Apple admitted they messed up the mix of initial iPhone orders (overordering the 5c), but it appears they got it fixed. It's entirely plausbie that they lost 1-2 million iPhone 5s sales from not having enough product, which doesn't necessarily bode ill for future sales prospects.
The 55 million wasn't outrageously optimistic, but it became a "floor" (with numbers like 57 and 60 thrown around). Since Apple didn't revise its guidance, I figured those were optimistic (though 51 was less than what I was expecting), but didn't think the reaction would be what it was. 8% is quite a drop, and about as much as Q2-13 when they did actually "miss" just about all of the analysts' expectations across the board, AND announced a change in their guidance approach at the same time.
The Q2 guidance probably spooked investors a bit, but it's coming off a quarter in which Apple hit their revenue and profit targets. In a quarter when Samsung saw Galaxy S4 sales crumble and both revenue AND profits fall, Apple hit all of their published targets while beating on margin, despite not getting the mix of iPhones right. If anything, this quarter showed that Apple should keep the focus on the high end of the market.
Like I said previously...it was only one product i pointed out for the quarter.
but since you bring it up again.....yeah...negative reviews for a long awaited product go a long way in stemming the tide the of no new innovation sentiment.
"...However, unlike Samsung, Apple still has some cards left, such as releasing ... a complementary smart watch."
Yeah, that outta' propel Apple's sales revenue, sales margins, and profits into the stratosphere - you're kidding right?
Yeah, that outta' propel Apple's sales revenue, sales margins, and profits into the stratosphere - you're kidding right?
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Analysts can definitely be off, but that's the point at which it's good to do a trade (sell if overvalued, buy if undervalued). I was just trying to say that having record sales doesn't necessarily mean anything. It's all about predictions, which is why Amazon gets such a high P/E ratio.
But Samsung doing poorly doesn't really help AAPL if AAPL doesn't do so great either
Probably a combination of the two. Lots of headlines are saying "weak iPhone sales." Later on in the article they mentioned weak guidance. We'll never know, but I wonder what the reaction would have been had they hit 55 million with exactly the same EPS (but obviously lower margins).
I think you misinterpreted Samsung results. As just reported by Reuters:
"Samsung Electronics Co Ltd sold a record 86 million smartphones in the fourth quarter and widened its lead over Apple Inc even after the U.S. firm reached a new iPhone sales high, data from research firm Strategy Analytics showed.
Samsung took 29.6 percent of the global smartphone market in the fourth quarter, ahead of Apple's 17.6 percent, as strong low-end market growth led by Chinese vendors continued to shake up the smartphone industry, the data showed.
Apple sold a record 51 million iPhones in the year-end quarter although its market share slipped from the previous year's 22 percent, as Huawei Technologies Co Ltd and Lenovo Group Ltd rose to become the world's No.3 and No.4 respectively."
But Samsung doing poorly doesn't really help AAPL if AAPL doesn't do so great either
True, and it's probably the combination that has investors spooked. On the whole, Apple performed at expectations while Samsung fell below on profits, units sold, and revenues. So it wasn't a case of Samsung losing sales to Apple as much as it was the market stagnating.
But remember that Apple hasn't released a larger screened phone yet. They can still do so, and take some of what Samsung currently brings in. They can also play follower with a smartwatch, learning from Samsung's mistakes (much as they did with the iPod back in 2001). IOW, Apple didn't sacrifice margin for volume. Samsung did and took a double-whammy.
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But that's unit shipments. Since Samsung's results fell well short of expectations, and even shy of Samsung's preliminary estimate released in early January, it seems to indicate that most of the "growth" in Samsung's sales were at the low-end ($50-$100 "smartphones" sold to replace old Nokia featurephones in emerging markets). That's not the kind of sales that will drive long term growth.
I wonder where Apple's Chairman of the Board is on all of this?
Oh, he would be the full time CEO of Calico (a google venture) and not focused as tightly on his main priority - hiring and firing the CEO.
But no need to worry - Tim and Art have told us that arrangement is ok.
Meanwhile, AAPL down 8% in after hours trading - trading just over $500.
Oh, he would be the full time CEO of Calico (a google venture) and not focused as tightly on his main priority - hiring and firing the CEO.
But no need to worry - Tim and Art have told us that arrangement is ok.
Meanwhile, AAPL down 8% in after hours trading - trading just over $500.
Apple and their buyers are no different than any other. They often ship (sell) more devices to retailers than will be sold through to end users, and the excess fills retailer inventories.
In fact, that's exactly how Apple explained their poorer than expected guidance for the coming early 2014 quarter, as compared to the same quarter last year.
You see, last December, retailers sold every iPhone they could get their hands on, and thus continued to buy a lot in early 2013. This December, they were able to buy more than they could sell, and thus will buy less in early 2014.
This kind of "shipped vs sold" discrepancy is part of the normal ebb and flow of inventory.
Nice Quote !
And How Much is Oil Majors' Profit Margin ?
They're around 25-30% at Their BEST !
Apple ALWAYS KEEPS more than 35% !!!
NOTWITHSTANDING, Such Fool Exsist Claiming that Apple's more than 37% Prifit Margin of Last Quarter is " Missing "
This Kind of CREATURE IS Nothing But " ESPIONAGE " !
Probably " 1234 " is His Espionage Number, Ha, Ha !!!
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Correcto, stock prices react based on the future not the present. The market is a forward looking mechanism when valuing stocks. Lower guidance means decreased earnings for the upcoming quarter/year so the stock price gets adjusted to the proper valuation.
Go look at TSLA, perfect example. Where are all the profits? The market doesnt care bc its pricing in future growth/earnings power of the company, should they not meet such growth projections the stock will collapse. Simple as that. It's basically the reverse of apple.
RighteousNixon
macrumors newbie
Feels good NOT being an Apple shareholder.
Gotta disagree with this one. Given the price I paid for my Apple Stock....well, its a beautiful thing being an Apple stock owner. A few percentage points up or down is completely irrelevant in my book, especially since I have no plan to sell anytime soon.
