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

[Rogifan]

I'm sorry but there's nothing in Apple's numbers today that warrant an 8-9% drop in the stock. They met or exceeded their guidance, and their guidance is much more realistic than it used to be. I'll bet that by the end of the week the stock will have gained back most if not all of what it loses tomorrow.

 

[Dmunjal]

No. July 2012, Apple stock is at 600$, Apple announces 35 billion revenue and gives guidance for the next quarter, 34 billion. And the stock rose another 100$ until then. They didn't give guidance for a growth in profit, at least not for the next quarter, which is the holiday quarter, yet the stock grew.

So the growth in profits certainly does not correlate with stock growth or fall, not 100% at least. There are other factors in this.

You're talking about guidance. What did they actually do in the October 2012 quarter? They blew out all expectations at $36B in revenue and higher profits YoY and QoQ. That was not the case this quarter.

 

[KPOM]

This is just more idiocy from analysts who don't know the first thing about the sectors they're covering. The 60 million number was idiotic, and I can tell that there is no real formula behind it. Anyone of us could have probably come just as close to predicting the number.

I'm pretty happy with these results. And with the shares dropping, it's time to buy.

The issue with the unit shipment estimates is that they are all just guesses. Apple potentially could manage expectations by releasing their own estimates, but then in doing so they'd be giving away information about the mix of sales. As it is, they still release sales totals, while Samsung tends to cherry pick and never releases actual total unit sales per quarter (just vague info such as "we sold over 40 million Galaxy Notes in the last 4 months").

Given that Apple sold over 47 million in the holiday quarter in 2012, the 55 million estimates weren't wildly optimistic. They did get China added sooner, and also snared NTT DoCoMo. Unit shipments probably hinged on the success or lack thereof of the 5c. We all know about the production constraints on the 5s, and it seems this year Apple thought that the 5c would pick up some of the slack. In retrospect they might have been better off making more 5s right off the bat.

 

[Rogifan]

I'm not talking about expectations of 55M vs. 51M. I'm talking about YoY iPhone and iPad sales. They sold more than last year and revenue was up but profit was flat. Shrinking margins is a problem.

I guess Apple just needs to rename themselves Amazon. Wall Street has no issues with Amazon growing the top line but not making a profit.

 

[Nevaborn]

I hate Wallstreet

They over expect and under value then get all shocked and nervy when a company sells more than ever but is short of the stupid figure they expected.

I think they over expect on purpose just to cause this stock dip. It's like a power play showing companies the effect they can have.

The margins won't be as high in the future they have to expect this. the cost of materials is going up as is everything in life tbh, Apple are looking at more expensive materials that and you have to add market saturation in to the frame.

I just see this as bias these days against Apple. they had their best quarter and lost value. The competition actually made losses yet the market didnt care. =\

 

[milo]

its not all i listed...but anyway....I don't know if they should give a pop...i do know they can go for 12K each.

I don't think (IMO and in my research) that the launch of the mac pro was all that well received. I do believe stuff like that matters.

You do think that a week's worth of sales should "give a pop"? And with a notion like that I'm sure your "research" into how the mac pro was received is plenty insightful.

 

[HAMEYO]

they are making lots of money but margins are dropping and growth is gone

5 years ago they never discounted the iphone. now the latest model is always on sale

Ha, Ha, There Seem to Be Gethering SO MANY BAGMEN, LACKAY and PROTEGÉ of VILLAIN here, to FELL DOWN Apple !!!

コノ馬鹿野郎共、消え失せろ！！！！！！

It's ABSOLUTELY INSANE to Claim " More than 37% GROSS MARGIN of THIS QUARTER is Missing ".

There's NONE COMPANY OF THIS SIZE & SCALE IN THE WORLD Make Such TREMENDOUS HIGH PERCENTAGE OF GROSS MARGIN AT ALL !

You're OBVIOUSLY AMATEUR OF BUSINESS WORLD !!!!!!

 

[Burger Thing]

i agree that there should be an iPhone with a larger screen, but it is apple's philosophy that they only make great products and that takes time. They will not just slap a bigger screen on something. They carefully craft the device to make the best possible experience while using the bigger screen. Samsung has like 53 different models of their phones, this isn't what Apple does.

Nobody is asking for 53 different models and looking at Samsungs dwindling profits in the mobile segment, they seem to be shooting in their own foot.

Just 2 different screen sizes will do. Instead of milking practically the same form factor, Apple should have released something different to the iPhone 5 1.5 years ago and started a new product philosophy.

 

[KPOM]

I'm not talking about expectations of 55M vs. 51M. I'm talking about YoY iPhone and iPad sales. They sold more than last year and revenue was up but profit was flat. Shrinking margins is a problem.

But that doesn't explain the stock price drop, since the shrinking margin was already priced in. In fact, margins shrank less than anyone, including Apple expected.

 

[Popeye206]

I'm sorry but there's nothing in Apple's numbers today that warrant an 8-9% drop in the stock. They met or exceeded their guidance, and their guidance is much more realistic than it used to be. I'll bet that by the end of the week the stock will have gained back most if not all of what it loses tomorrow.

I would agree. iPhone numbers were the only "miss" and they still pulled out an impressive qtr. I think all that will save Apple with investors will be a new product that shows they're back to being a leader.

I'm in for the long term and I think by this time next year we'll look back as 2013 was a good year to buy more.

 

[KPOM]

I just see this as bias these days against Apple. they had their best quarter and lost value. The competition actually made losses yet the market didnt care. =\

To be fair, Samsung took it on the chin last week, as well.

 

[SusanK]

The more he talks, the more she drops!

Timmy you've had plenty of time to get into the role of CEO. We need some new revenue streams for 2014. The street is tired with your current lines and your market shares aren't growing like they used to. Quit boasting about your own success and lets see something exciting!

Yep, more gonna dos from Cook.

 

[iBug2]

You can't be serious about A.I. A.I. has been around for almost half a century and the most it managed to achieve so far is to win on Jeopardy. Regardless, Siri's example clearly shows that phone users do not have any problems that they would want A.I solved for them. They want to twit and snapchat and current phones are perfectly capable to serve them there.

First of all, winning on jeopardy is a very important feat.

Second of all, people do have problems that they want the A.I. to take care of. Siri isn't just too good at doing that so people don't use it that often. If Siri was flawless and could do 10 times more, I'd be using it a lot more.

 

[KPOM]

Just 2 different screen sizes will do. Instead of milking practically the same form factor, Apple should have released something different to the iPhone 5 1.5 years ago and started a new product philosophy.

My guess is that we'll see that this year. Samsung has played all their cards. Apple still can release a larger iPhone and a smartwatch. In the meantime, Samsung is under pressure to release the S5 (since the S4's sales patterns were actually noticeably worse than the S3's based on what data is available). If it's metal, 64-bit, and has some more gee-whiz features to try to win back the momentum it will probably also be costlier for them to produce.

 

[macduke]

Having $158b in undistributed/uninvested cash is NOT good work. Companies are valued based upon an eventual return of cash to shareholders (via regular dividends, special dividends, buybacks, or ultimate liquidation).

Sounds like someone is pissed about their Apple shares. First of all, what I wrote doesn't preclude dividends or buybacks. Second of all, Apple has already initiated a dividend and share repurchase program. Third of all, there's nothing to say that they won't increase the amounts going forward.

As someone who doesn't own Apple stock, I prefer for Apple to do what is in Apple's best interests. I'm pretty sure they have a better idea of how to manage $158 billion dollars than you do. My personal wish is for more investment in R&D. Apple Maps and other services need some help, and a mobile payment system based on Touch ID and iBeacons would be amazing. Their potential to make money from mobile payments is enormous.

 

[HAMEYO]

only on wall street is it a disappointment when apple sells an all-time record number of iphones (51 million) in a quarter.

yes, because they are protegÉ of villain !!!!!!

 

[JayMBP]

To be honest I thought the number was not impressed at all. Considering they launched 5S in more markets than ever before (including China), the result was much less than I expected.

Apple usually either beats or matches what analysts expect. It's rather unusual they came in so much less than analysts.

 

[KPOM]

A lot of products used to be announced in January but not anymore

Announced, but not released (e.g. iPhone, iPad were both announced in January but not released for months). Apple did release some notebooks in the post-holiday quarter (mostly updates), including the original MacBook Air, but they quickly shifted to later in the year (either July for back-to-school sales, or late in the year for the holiday quarter).

 

[Dmunjal]

I guess Apple just needs to rename themselves Amazon. Wall Street has no issues with Amazon growing the top line but not making a profit.

You're absolutely right. The only difference I can see is that Amazon has little or no competition and their market opportunity is almost endless. Apple's smartphone market is highly competitive and somewhat near saturation.

 

[TallManNY]

You can't be serious about A.I. A.I. has been around for almost half a century and the most it managed to achieve so far is to win on Jeopardy. Regardless, Siri's example clearly shows that phone users do not have any problems that they would want A.I solved for them. They want to twit and snapchat and current phones are perfectly capable to serve them there.

I think you are wrong. I think that functional and effective A.I. in your pocket is definitely something that folks want. I won't necessarily be A.I. that you talk to, but it will be something a little like Google Now that pulls stuff up on your phone before you ask it.

Siri doesn't get used because it fails too often to be a useful experience. And it is too slow. But it will get better and become more used.

But if you are right, then the phone you have in your pocket is going to be pretty similar to the phone folks are buying 5 years from now. That would be like my laptop from 10 years ago which is really not that much different from my 2013 laptop (except current laptop is thinner). But experience using them (for example in what I'm doing right now) is not too different. I am sure that my phone 10 years from now will blow my current iPhone out of the water and do radically different things than what I currently can do with my phone.

 

[KPOM]

To be honest I thought the number was not impressed at all. Considering they launched 5S in more markets than ever before (including China), the result was much less than I expected.

Apple usually either beats or matches what analysts expect. It's rather unusual they came in so much less than analysts.

Apple changed their guidance practices about a year ago. They now consistently come in within their published ranges. As for the unit sales, 51 million does seem a bit low given China and NTT DoCoMo, but remember that part of that reflects maturation of North America and Europe. What it seems to indicate, combined with Samsung's results, is that the heady growth of the smartphone market has come to an end. Sure there will be unit growth, but mostly at the low end as $50 feature phones sold in emerging markets are replaced by $50 "smart phones."

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You're absolutely right. The only difference I can see is that Amazon has little or no competition and their market opportunity is almost endless. Apple's smartphone market is highly competitive and somewhat near saturation.

People have been saying that for 17 years about Amazon. My guess is that Amazon simply can't jack up prices the way they would need to in order to justify their P/E ratio. If they did, that opens the market to a bunch of others. Amazon just hums along with little to no profits (Apple, Google, and Samsung each make about as much or more in a single quarter as Amazon has in 17 years). They aren't doing much with the Kindle Fire series, either. They have a killer product that bests the iPad and Nexus 7 in many respects, and are selling it at giveaway margins. Sure they upsell Amazon Prime, but that's $79 that's again mostly given away through "free" or reduced price shipments and streaming. If they keep on using a utility pricing model, eventually Wall Street will get wise and price them like a utility.

 

[IJ Reilly]

Announced, but not released (e.g. iPhone, iPad were both announced in January but not released for months). Apple did release some notebooks in the post-holiday quarter (mostly updates), including the original MacBook Air, but they quickly shifted to later in the year (either July for back-to-school sales, or late in the year for the holiday quarter).

Some of the gear announced in January was shipped right away or soon after, but that was basically a ridiculous schedule for a consumer products company, which is why it was abandoned. Apple has to have its product setup in place for calendar Q3 and especially Q4.

 

[SusanK]

Down 42.99

 

[Rogifan]

I would agree. iPhone numbers were the only "miss" and they still pulled out an impressive qtr. I think all that will save Apple with investors will be a new product that shows they're back to being a leader.

I'm in for the long term and I think by this time next year we'll look back as 2013 was a good year to buy more.

iPhones were a miss based on Apple's guidance or Wall Streets? The latter I couldn't give a crap less about. Just shows that Apple is much better at forecasting than they are.

 

[luckydcxx]

Dude, if they make a bigger iPhone it is just going to be a bigger screen. There isn't really much crafting of a better experience between the iPod Touch, iPad Mini, and iPad Air. It is just screen size. The products are well made, and thought is given to the screen size (and to how the OS fits on that screen). But let's not get carried away. They still see the iPhone as a phone that goes in their jean's front pocket. So in that case, smaller is better. Many folks are basically using their phone as an email reader and almost never as a phone that they actually hold up to their ear. Maybe in those circumstances bigger is better.

i think you are wrong. with a bigger area to work they can change where the speaker is (fingers crossed for front facing), the bezel size, the battery will get larger. there is much more then taking the iPhone 5 design and making it .8 inches larger and leaving the rest.