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Apple Reports Strongest Ever Quarterly Earnings: $13.1 Billion Profit on $57.6 Billion in Revenue in Q1 2014

blairh said:
I think the Nexus 5 is proof that you can get a great phone with zero compromises for $350. I think people are slowly starting to see that we are getting fleeced by signing these 2 year contracts.
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Google's business model is different. They make their money on ads, not from hardware sales. Notice that neither Apple nor Samsung sell premium smartphones for $350. That's because they make their money from hardware sales. Google arguably is trying to force the price down, using their market power in the ad market to put pressure on Apple and Samsung.
 
Michael CM1 said:
Can't imagine how these guys ever wrecked an entire planet's economy. "Record number of devices sold? OH MY LORD THIS IS AWFUL. SELL, SELL, SELL."
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Well, they expected higher sales. Of course, in 2006 they also "expected" real estate prices in Florida to keep rising. Wall Street tends to overreact. Apple was overpriced at $700 in 2012. It seems underpriced at $500 in 2014. From 2009-2012 Apple seemingly could do no wrong. Now it seemingly can do no right as far as the Street is concerned.

The reality is somewhere in between. There are some significant challenges, such as the slowdown in the premium smartphone market, but there are still some opportunities, such as China and larger smartphones.

Note that part of the reason for Apple's "miss" was that they underestimated demand for their expensive phone and overestimated demand for their "cheaper" phone. Sure, a $400 iPhone 5C might have moved more units, but it would have made less money. The $550 iPhone 5C was worth a shot. Apparently it didn't strike the right balance, so we'll probably see a tweak in strategy with this year's update.
 
Michael CM1 said:
Can't imagine how these guys ever wrecked an entire planet's economy. "Record number of devices sold? OH MY LORD THIS IS AWFUL. SELL, SELL, SELL."
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Thats not really what is happening here..The stock price to a large extent already reflected the market's opinion of how apple would have performed in Q4 2013..Apple hasn't really surprised most in the market by selling the no. of iPhones that it did in Q4..atleast at the institutional level..The current price reflects on what investors think the next few months (Q1) will bring to the company's performance..and as such how the current share price correlates to that performance. So if they think that flat Q1 predictions are reflective of a lower stock price then many may sell at the higher level...I think a lot of wall street haunchos want to see the next big thing for apple as they see a lot more competition in the smartphone dommain which could only mean pricing pressure and lowering margins..The pattern with apple has been to come out with incredible "forward thinking" devices which were so much "better accepted" by the market than those before it that it allowed apple to capture a huge chunk of the market at a very high profit margin..If apple does this with new product categories, i am sure a lot of the investors would be back on the "Ship" and would bet the stock for the medium term...Was at a dinner last week with freinds who work on wall street and most are not willing to bet that apple can sustain an ever increasing profit margin on the product it is currently selling given that competition eventually closes the gap in technology..They know apple has the INNOVATION and a proven track record of success and want to see some of that magic...
 
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Only in America you can have two years of 13.1 BILLION dollars profit for each year and call it a disappointment and stock drops
 
This is an opportunity to buy

Apple has hinted several times at new product lines, and it is becoming ever clearer what these could be:
  • iPad Pro
  • Larger iPhone
  • Payment system
  • Wearables
  • Further development of the Apple TV

I didn't include a Retina MacBook Air, because that would not necessarily create a new product line.

It is likely that at least the larger iPhone will be introduced this year as we expect the two-yearly design overhaul of the iPhone line in general.

One could argue that some of this is already priced into the stock, but considering the low amount of transparency in Apple's product pipeline most large investors will remain prudent and not attempt a stock buying decision on an unknown line of product with an unknown amount of revenue and profit. I personally think this is why now is a good time to invest.

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Carlanga said:
Only in America you can have two years of 13.1 BILLION dollars profit for each year and call it a disappointment and stock drops
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The stock market is global.
 
Michael CM1 said:
Can't imagine how these guys ever wrecked an entire planet's economy. "Record number of devices sold? OH MY LORD THIS IS AWFUL. SELL, SELL, SELL."
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The ignorance here is absolutely astounding.

NT1440 said:
Wanna bet he made money either way ;)?
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This doesn't make sense. He has a long position. If the stock price goes down he loses money.

Carlanga said:
Only in America you can have two years of 13.1 BILLION dollars profit for each year and call it a disappointment and stock drops
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You know, or any well-functioning market that doesn't look at one earnings number and think that's all it takes to properly value a company.
 
Carlanga said:
NASDAQ: APPL
Location: NYC
What is NASDAQ stock market: an American stock exchange.
2nd only to NYSE in the world from all stock exchanges
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Come on you are smarter than that and you know what I mean. Everyone on the planet can buy stock on the Nasdaq whenever they like as long as the market is open.

There are not only Americans trading on the American stock exchanges.
 
peterdevries said:
Come on you are smarter than that and you know what I mean. Everyone on the planet can buy stock on the Nasdaq whenever they like as long as the market is open.

There are not only Americans trading on the American stock exchanges.
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Come On, " Global " is Really Convenient Terminology, isn't it, for YOU VILLAIN !

Could You PARAPHRASE What The " High Frequency TRADING " is, Please ?
 
This preoccupation with wall street is the biggest threat I see to Apple as an innovator. Steve Jobs famously thumbed his nose at Wall Street and did what he thought was best for the customer in the hope that money would follow. This is what made Apple a disruptive influence in the industry making products that didn't even make sense when they were launched. Taking these risks are what made Apple different and it remains to be seen if this is still going to happen and new disruptive products are works.
 
As the iPhone Net Sales is so Spiky, could you put this data on top of all the others?

It's hard to follow the evolution of iPad Net sales because of the way you made the chart... graphics are nice, but please think how the viewers can interpret the image, don't limit to making a chart and throwing it in a post.

Thank you!
 
peterdevries said:
Apple has hinted several times at new product lines, and it is becoming ever clearer what these could be:
  • iPad Pro
  • Larger iPhone
  • Payment system
  • Wearables
  • Further development of the Apple TV

I didn't include a Retina MacBook Air, because that would not necessarily create a new product line.

It is likely that at least the larger iPhone will be introduced this year as we expect the two-yearly design overhaul of the iPhone line in general.

One could argue that some of this is already priced into the stock, but considering the low amount of transparency in Apple's product pipeline most large investors will remain prudent and not attempt a stock buying decision on an unknown line of product with an unknown amount of revenue and profit. I personally think this is why now is a good time to invest.

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The stock market is global.
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On the conference call Cook specifically said there would be new products that don't exist today. While he didn't give details he was very clear about brand new, not evolutions on existing stuff.

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Badandy said:
You know, or any well-functioning market that doesn't look at one earnings number and think that's all it takes to properly value a company.
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Do you honestly believe what Apple reported and said yesterday warrants wiping $40B off the value of the company?
 
Fact or fiction:

If AT&T and Verizon drop subsidies like T-Mobile did, would that equate to a 10% drop in Apple stock price?
 
TBH I suspect the analysts are 'worried' because Apple is reliant so heavily on the iPhone. I am not worried at all because I expect a new product line this year of some sort. I expect iPhone sales to drop a bit now as it is basically peaked (and I mean the market is saturated nothing else).
 
Rogifan said:
On the conference call Cook specifically said there would be new products that don't exist today. While he didn't give details he was very clear about brand new, not evolutions on existing stuff.
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That is even more interesting. I would be interested if he meant products not existing at all or specifically in Apple's portfolio.

If that is the case than I would argue that my argumentation is even more valid.
 
1) For those going on about 'wearable computers' - the only ones that exist today are either novelty (Google Glass) or complete and utter commercial failures (Samsung Galaxy Gear). I still can't work out why people on this forum are so hyped up about something that is a business failure in every respects with little in the way of real world demand or interest in such products beyond those who have more dollars than sense.

2) A lot of the problems Apple face today can be traced back to the arcane intellectual property laws, the idiotic media companies hell bent on segmenting the global marketplace by region and the lack of consistent high speed internet even within many of the OECD countries that it serves. The problem isn't coming up with new ideas but coming up with new ideas that can co-exist with the crappy infrastructure that exists today combined with the other obstacles.

3) The way these so-called 'investors' behave is exactly wrong with the market - if I had my way I'd ban automated trading and tax like there is no tomorrow those who buy and sell shares more times than they by underpants; either you're an inventor or a gambler and if you're a gambler then quite frankly the government should send a clear message that you're not wanted in the marketplace and that you're better off heading to Los Vegas if that sort of thing tickles your fancy.

4) The payment system looks pretty damn good which makes me wonder whether they could eventually create a payment system akin to VISA, Mastercard etc. where one can treat it almost as like a bank account and load it in much the same way that you can load pre-paid debit cards over the counter.
 
Looking at the pie chart - all I can say is that with ~75% of the sales coming from the iPad and iPhone line - it's no surprise they are working on being more competitive with different sizes (at the very least).

You can argue all day that Apple doesn't need to pay attention or what-have-you about the competition - but you'd really have to be in denial to think so.
 
WallToWallMacs said:
1) For those going on about 'wearable computers' - the only ones that exist today are either novelty (Google Glass) or complete and utter commercial failures (Samsung Galaxy Gear). I still can't work out why people on this forum are so hyped up about something that is a business failure in every respects with little in the way of real world demand or interest in such products beyond those who have more dollars than sense.
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This is what everyone said about tablet computers and look where we are now.
 
Gudi said:
Okay. I'm not an accountant, but isn't the comparability of numbers always questionable, through different number of days in a quarter and thousand other reasons?
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Maybe, but Apple announces the ones that have a significant impact, so that we can put the numbers in context.

Still we need to compare something, and why not the official numbers Apple reports?
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Because you are comparing apples and oranges. For example, if Apple returned to the subscription model for iPhone sales that it originally used, they would have deferred around $20 billion in iPhone hardware revenue. Just because they changed accounting strategies in that way doesn't mean that actual revenues shrunk.

The guidance range for next quarter revenue isn't so good either.
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Only if you are grading on a curve that has $9-10 billion in profits equal not so good. :D

Carlanga said:
Only in America you can have two years of 13.1 BILLION dollars profit for each year and call it a disappointment and stock drops
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That was $13.1 billion in one quarter, not year. :)
 
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