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

[IJ Reilly]

You are oversimplifying it. The "professional" analysts work for investment banking firms. The "amateurs" are just that (bloggers, etc).

By that definition, anyone who doesn't work for someone else is an amateur. No, not hardly. Just because MR made up a definition doesn't mean it's right. It isn't. Nobody else called unaffiliated analysts "amateurs" until one MR writer couldn't think of the right word.

 

[zipa]

But if that's the case, then it doesn't make sense why they want Apple to go downmarket.

That's not how the stock market works. Q1/14 results were "added into" the stock price sometime during last spring to fall. The stock market has a forward outlook of about 6-12 months. The results from 27/1 led to adjustments in the price that reflected the expectations from 6 months ago (if any), and to adjustments that were made because of the outlook for the next quarters.

And yes, Apple made 13 billion during the quarter. That's a massive result, if you are a fledgling startup valued at 5 billion. For one of the biggest companies in the world with a market cap of half a trillion, that's about on par with expectations.

 

[giantfan1224]

It matters because such wreckless speculation pushes businesses to do stupid things such as share buy backs with borrowed money. It is the short term investors like Icahnn that undermine confidence in the market for the average investor.

It doesn't matter. If a company is so easily swayed by day-to-day movements--or "wreckless (sic) speculation"--of its stock then they're not worth investing in.

 

[sdilley14]

Aapl

I just grabbed this from an article on dividend.com...

Apple, Inc. Beats Q1 Earnings Estimates

•Apple reported first quarter revenues of $57.6 billion, up from last year’s Q1 revenue of $54.5 billion.

•The company’s Q1 profit came in at $13.1 billion, no change from last year’s Q1 profit.

•AAPL’s EPS for the quarter was $14.50, up from last year’s Q1 EPS of $13.8.

•AAPL beat analysts’ estimates of $14.09 EPS on revenues of $57.46 billion.

•The company reported iPhone sales of 51 million, an all-time quarterly record; this, however, was below the consensus 54.6 million. iPad sales came in at 26 million unites, also an all-time quarterly record. Apple also sold 4.8 million Macs, versus the 4.1 million figure seen a year ago.

...and the stock is down $40-$50/share since the report came out.

Someone explain this to me. I can't make any sense of it. How can you beat analyst expectations, post increased YoY #s in most key categories, post $13b in net revenue...and that news is met with a 5% hit in the stock value??

 

[KPOM]

That's not how the stock market works. Q1/14 results were "added into" the stock price sometime during last spring to fall. The stock market has a forward outlook of about 6-12 months. The results from 27/1 led to adjustments in the price that reflected the expectations from 6 months ago (if any), and to adjustments that were made because of the outlook for the next quarters.

And yes, Apple made 13 billion during the quarter. That's a massive result, if you are a fledgling startup valued at 5 billion. For one of the biggest companies in the world with a market cap of half a trillion, that's about on par with expectations.

I know about expectations vs. absolute results. I've been investing for over 25 years now. That said, it seems that with respect to Apple, there was no way that they could meet the consensus iPhone shipment estimates in Q1-14 without either massively beating the revenue and EPS guidance, or by missing on margin. So it seems that their models were a bit flawed, or the overall "mix" (iPhone, iPad, Mac, other) was significantly different from what most had modeled when coming up with their revenue, EPS, and margin estimates. Either that, or it was really the Q2-14 forecast that caused most of the drop in the stock.

In any case, the headlines that "light iPhone sales" caused the drop are simplistic. The reality is more nuanced than that.

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...and the stock is down $40-$50/share since the report came out.

Someone explain this to me. I can't make any sense of it. How can you beat analyst expectations, post increased YoY #s in most key categories, post $13b in net revenue...and that news is met with a 5% hit in the stock value??

Apple's Q2-14 forecast is for $40-42 billion in revenue, while consensus was $44-46 billion in revenue. Also, apparently the iPhone "miss" raises concerns about the "run rate" (i.e. iPhone sales over the next 3 quarters, particularly since it is cyclical and tends to decline in the April-June, and July-September quarters after Samsung releases its new Galaxy model, and as the new iPhone release approaches).

 

[WallToWallMacs]

It doesn't matter. If a company is so easily swayed by day-to-day movements--or "wreckless (sic) speculation"--of its stock then they're not worth investing in.

One could say the same thing about Icahnn - if he doesn't like how Apple is run then he should sell his shares and find a company that is run the way he would like.

 

[giantfan1224]

One could say the same thing about Icahnn - if he doesn't like how Apple is run then he should sell his shares and find a company that is run the way he would like.

Ok...

My point is the intra-day movement of a stock should only be of concern to those that day trade. Those that are long, and certainly the company itself, should not concern themselves whatsoever.

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I just grabbed this from an article on dividend.com...

Apple, Inc. Beats Q1 Earnings Estimates

•Apple reported first quarter revenues of $57.6 billion, up from last year’s Q1 revenue of $54.5 billion.

•The company’s Q1 profit came in at $13.1 billion, no change from last year’s Q1 profit.

•AAPL’s EPS for the quarter was $14.50, up from last year’s Q1 EPS of $13.8.

•AAPL beat analysts’ estimates of $14.09 EPS on revenues of $57.46 billion.

•The company reported iPhone sales of 51 million, an all-time quarterly record; this, however, was below the consensus 54.6 million. iPad sales came in at 26 million unites, also an all-time quarterly record. Apple also sold 4.8 million Macs, versus the 4.1 million figure seen a year ago.

...and the stock is down $40-$50/share since the report came out.

Someone explain this to me. I can't make any sense of it. How can you beat analyst expectations, post increased YoY #s in most key categories, post $13b in net revenue...and that news is met with a 5% hit in the stock value??

And the 26 million iPads was above the estimates of 25 million.

 

[lazard]

I just grabbed this from an article on dividend.com...

Apple, Inc. Beats Q1 Earnings Estimates

•Apple reported first quarter revenues of $57.6 billion, up from last year’s Q1 revenue of $54.5 billion.

•The company’s Q1 profit came in at $13.1 billion, no change from last year’s Q1 profit.

•AAPL’s EPS for the quarter was $14.50, up from last year’s Q1 EPS of $13.8.

•AAPL beat analysts’ estimates of $14.09 EPS on revenues of $57.46 billion.

•The company reported iPhone sales of 51 million, an all-time quarterly record; this, however, was below the consensus 54.6 million. iPad sales came in at 26 million unites, also an all-time quarterly record. Apple also sold 4.8 million Macs, versus the 4.1 million figure seen a year ago.

...and the stock is down $40-$50/share since the report came out.

Someone explain this to me. I can't make any sense of it. How can you beat analyst expectations, post increased YoY #s in most key categories, post $13b in net revenue...and that news is met with a 5% hit in the stock value??

Apple got slammed because their earnings growth was flat.

There are plenty of reasons for the the drop in share prices, the most obvious being the generally poor outlooks and increasingly uncertain picture in emerging makets. In terms of earnings themselves, the simplest explanation for analysts overlooking EPS coming in "better than expected" is that net income has been disappointing. Corporate America is trying to buy its way into apparent growth by buying back shares and investors are crying foul.

For the last couple years companies have been trying to sell the idea that EPS growth is the same thing has earnings growth. EPS is just net income divided by shares outstanding. That means companies can grow EPS by either a) growing net income or b) reducing shares by spending billions buying back stock.

Apple went with option 'B'. Net income for last quarter came to $13.072 billion compared to $13.078 billion in the same quarter for 2102. EPS was a record high $14.50 per share because Apple spent $5 billion buying back stock. If not for the buyback, Apple would have posted EPS of $13.80 vs. $13.81 last year.

 

[alent1234]

not to worry, apple has a secret stash of deferred revenue and the share price will be $2000 before we know it with earnings growing 20% a year for the next decade

 

[BaldiMac]

And yes, Apple made 13 billion during the quarter. That's a massive result, if you are a fledgling startup valued at 5 billion. For one of the biggest companies in the world with a market cap of half a trillion, that's about on par with expectations.

On par? The second biggest corporation in the world will probably report $8-9 billion in earnings. There are no $5 billion startups making $13 billion net profit in a quarter.

not to worry, apple has a secret stash of deferred revenue

It's not secret at all. They clearly announced it. From the OP "Total deferred revenue was $11.4 billion".

and the share price will be $2000 before we know it with earnings growing 20% a year for the next decade

Keep fighting those strawmen!

 

[IJ Reilly]

Ok...

My point is the intra-day movement of a stock should only be of concern to those that day trade. Those that are long, and certainly the company itself, should not concern themselves whatsoever.

I'm with you on this basic point, but I even those of us who are very, very long on AAPL are becoming increasingly frustrated -- and not with what happened yesterday, or even last week or month, but what's been happening over the last 18 months. Ironically, the only good thing happening with AAPL these days is Carl Icahn.

 

[alent1234]

carl icahn wants some quick cash
in the end apple is too big to grow by any substantial amount

they had a good thing going since the iphone costs about as much as an average PC from a few years ago but brings in much more profit. but there isn't a product on the horizon that will bring in $250 or more in profit and will be bought by half of all the people in the world

 

[zipa]

In any case, the headlines that "light iPhone sales" caused the drop are simplistic.

Headlines are click bait, nothing new here.

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On par?

Yes. On par. The P/E and forward P/E are nothing out of the ordinary, the dividends are lame and the immediate outlook wasn't all that good. I can't understand why people are so puzzled about this.

 

[vomhorizon]

all the news from india is that apple is heavily discounting the iphone. its being discounted in the USA as well and its not only best buy doing it. no way you can profit from selling the phone $75 off the regular price

same with china and russia. most people can't afford $800 for a new phone.

even in the USA the customer is king now. AT&T is letting me go to Next with 9 month left on my contract and i'll probably get a Note 3 because you can actually read a book on it

And what exactly did that have anything to do with my comment?

 

[alent1234]

the new markets aren't producing the revenues and profits wall street was expecting and that will lift the stock. fact is that most people in those markets cannot afford even the cheapest iphone

apple has to heavily discount there and keep the prices up here. but with the market being saturated here there isn't any growth in the US market either

even google is having issues in developing markets since so many android makers don't certify their phones with google or ship them with google apps

 

[vomhorizon]

the new markets aren't producing the revenues and profits wall street was expecting and that will lift the stock. fact is that most people in those markets cannot afford even the cheapest iphone

Profit margins have come down on many devices..However they are still very good.

fact is that most people in those markets cannot afford even the cheapest iphone

Apple has been selling its products in very good ammounts in both India and China, and I think they have had the best years in both those markets. Their would always be a far smaller market that would be ablet to afford premium smartphones and I doubt that any either in the market or the industry think otherwise. Having said all that, 50+ million iPhones is damn impressive given that they rank among the higher priced phones in their respective categories. Time and time again apple has resisted the urge to make devices with affordability in mind. We do not have a CHEAP laptop..etc I don't think apple will go down this road. The C was just a better packaged 5 that used the same formula (discounted previous gen phone) that apple has used for some time now.

apple has to heavily discount there and keep the prices up here.

5s prices are damn high in India for example ( http://www.mysmartprice.com/mobile/apple-iphone-5s-msp3216)

Where they have heavily discounted is the 4s and I believe that they are even planning to (or have) introduce the 4 at a heavily discounted price. I do not know what iPhones are going for in China, but the prices should be fairly in line with what is being reported. Margins (Apple's margins in general) have come down by less than 1% compared to same time last year and this despite of the fact that INTERNATIONAL sales accounted for a higher than usual percentage of product sales.

 

[Max(IT)]

As a person who uses a Note 3 for real world usage I can assure you your "advice" is biased, subjective and baseless.

Who cares about your note 3 in this thread or even in this forum (Apple based) ?

 

[BaldiMac]

Yes. On par. The P/E and forward P/E are nothing out of the ordinary, the dividends are lame and the immediate outlook wasn't all that good. I can't understand why people are so puzzled about this.

On par with what companies, specifically? Certainly not their peers in tech. Keep in mind that your original comment was about the $13.1 billion in quarterly profit.

Sounds to me like you are just throwing out a bunch of terms without any context whatsoever.

 

[zipa]

On par with what companies, specifically? Certainly not their peers in tech.

Certainly pretty much all of their peers. A P/E in the "teens" is nothing to get fantastically giddy about.

You don't seem to understand that a company that is worth half a trillion is indeed expected to churn out such profit, or else it would not be valued so high. This is really basic third grade math, but still a lot of people seem not to be able to get it. Which is quite disturbing, to be honest.

 

[Max(IT)]

iphone ASP is down
people don't care about it except the fanboy rush for the 2 months after its released

used to be apple literally sold every iphone it made at full price, now its discounted 2 months after release

lower ASP's mean lower profits and no growth. go read the articles about iphone in india. apple is discounting it because its too expensive. china release isn't very hot either.

same story as windows almost 15 years ago. US market was saturated and it was too expensive for outside the USA

Thank you !
You made me laugh very loud ....
People don't care about iPhone, yes, sure, they just set a new all-time quarterly records of 51 MILLIONS sold.

Nice to see people with no clue at all acting like expert traders and analyst ....

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Apple's Q2-14 forecast is for $40-42 billion in revenue, while consensus was $44-46 billion in revenue. Also, apparently the iPhone "miss" raises concerns about the "run rate" (i.e. iPhone sales over the next 3 quarters, particularly since it is cyclical and tends to decline in the April-June, and July-September quarters after Samsung releases its new Galaxy model, and as the new iPhone release approaches).

Decline in iPhone sales has nothing to do with Samsung releases .... Sales decline when the new iPhone model is approaching , as usual, in July-September quarter.

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And what exactly did that have anything to do with my comment?

He just want to let you know he's going to buy a Note 3 ....

 

[TWSS37]

Who cares about your note 3 in this thread or even in this forum (Apple based) ?

I didn't bring it up, I was responding to a post that was referencing it.

 

[BaldiMac]

Certainly pretty much all of their peers.

Again, be specific in the metrics and comparisons you are referring to.

A P/E in the "teens" is nothing to get fantastically giddy about.

I'm not sure what your point is here. Apple's P/E is extremely low compared to it's peers. Which would seem to indicate that it is undervalued.

If fact, the lower P/E directly contradicts your point that profits are "on par" with their peers in relation to their market cap.

You don't seem to understand that a company that is worth half a trillion is indeed expected to churn out such profit, or else it would not be valued so high. This is really basic third grade math, but still a lot of people seem not to be able to get it. Which is quite disturbing, to be honest.

I'd love to see your math to calculate these expectations. Should be easy if it's really basic third grade stuff.

In reality, stock prices are not based on any single metric.

 

[zipa]

I'm not sure what your point is here. Apple's P/E is extremely low compared to it's peers. Which would seem to indicate that it is undervalued.

The same as Microsoft and higher than Samsungs, which to me indicates that they are pretty much on par with expectations.

 

[BaldiMac]

The same as Microsoft and higher than Samsungs, which to me indicates that they are pretty much on par with expectations.

No, it is lower than Microsoft or Samsung Electronics if you want to cherry pick two companies that are close. More to the point, its lower than the Software and Consumer Electronics industry averages. And, of course, much lower than Google or Amazon.

http://investing.money.msn.com/investments/key-ratios?symbol=SSNLF&page=PriceRatios
http://investing.money.msn.com/investments/key-ratios?symbol=MSFT&page=PriceRatios
http://investing.money.msn.com/investments/key-ratios?symbol=aapl&page=PriceRatios

 

[Max(IT)]

This thread amuse me....

This is supposed to be a tech enthusiastic forum, centered on Apple hardware and software.
Well, Apple in a time of market saturation / financial crisis, has jut set a new all-time record for iPhone and iPad sales.
Instead of discuss about that, the thread was stormed by Google and Microsoft supporters making financial analysis about Apple trying to convince people that Apple is doomed and their beloved brands will triumph.

Are you serious guys ??? Who the hell cares about earnings, dividends, P/E ratio and something like that ! Is this Wall Street Rumors Forum ???
Now everyone with a Galaxy Note 3 is an expert trader .... Lol.
Give me a break ....