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Apple reports record earnings, shares slide 8%


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Old 23-01-2013, 23:20
IslandNiles
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Article here:

http://www.theverge.com/2013/1/23/39...-2013-earnings

Record earnings for the quarter which just beat Wall Street expectations haven't prevented the share price from falling, at least in the short-term.
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Old 23-01-2013, 23:41
paulbrock
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depends on which 'expectations' you read. 48m-50m iphone sales were the figures bandied around earlier. Of course, very high expectations, but then a very high stock price.

$13.1b profit versus $13.06b profit for the same period last year is unlikely to keep investors happy..."record figures" or not. Margins down too. 24% profit vs 28% profit. One way of looking at it is they spent $8bn more to get a further $40 million profit.

Still, I'd swap my bank account with theirs
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Old 23-01-2013, 23:47
Everything Goes
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No data on how many iPhones were iPhone 5. Just a total of 47.8m for all iPhones.

Apple also said it sold 4.1 million Mac computers, down 21% from a year ago, and 12.7 million iPods, a drop of 18%.

Read more: http://www.nydailynews.com/news/nati...#ixzz2IqUsKcGO
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Old 23-01-2013, 23:50
IslandNiles
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Yeah, Macs were the big surprise really. The iPod decline is expected and a continuation of the existing trend.
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Old 24-01-2013, 00:28
swordman
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What it does show is how increasingly reliant they are on the iPhone in a market that will become increasingly competitive.

It seems claims of 49 million iPhone 5 sales were way off the Mark.
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Old 24-01-2013, 00:36
paulbrock
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interesting Beeb article.

http://www.bbc.co.uk/news/business-21172259
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Old 24-01-2013, 00:39
The Lord Lucan
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They did say supply constraints were the biggest issue during Q4 all new products, production only just starting to ramp up. Still to this day on some products they have not caught up with demand and with 7 days less in this quarter than the same period the year before.

Never the less they are some crazy revenue figures.. Even just one minutes worth of sales would make my bank account look very rosy indeed!
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Old 24-01-2013, 00:42
IslandNiles
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Quite a negative take from the BBC really. I think the iPhone sales were pretty much in line with what was expected. Perhaps marginally lower than some expectations.

It's insane that any company can make $13m profit in a single quarter and it be seen as a failure!
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Old 24-01-2013, 00:47
Step666
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$13.1b profit versus $13.06b profit for the same period last year is unlikely to keep investors happy..."record figures" or not. Margins down too. 24% profit vs 28% profit. One way of looking at it is they spent $8bn more to get a further $40 million profit.
Nail on the head.
It doesn't matter how much revenue they take if the profits are static, all that means is they're running just to stand still.

It's related to the points people have made about Apple having become increasingly reactionary - the iPad Mini apparently has a much lower profit margin than the full-size iPad, something Apple would not have wanted but were forced to accept to avoid losing ground on their competitors.

They're still a long way off being in genuine trouble but I think they've been found out a little, which is reflected in the share price.
The idea that the most 'valuable' company in the world makes what are, in essence, shiny toys (not a comment on Apple's product range in particular, the same is true of most of Samsung's products etc) always struck me as weird. The drop in the share price seems to be more of a self-correction than anything else.
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Old 24-01-2013, 00:53
Roush
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Nail on the head.
It doesn't matter how much revenue they take if the profits are static, all that means is they're running just to stand still.
Don't forget that Q1 2012 was 14 weeks, whereas it was only 13 weeks this year.
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Old 24-01-2013, 00:56
Step666
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Don't forget that Q1 2012 was 14 weeks, whereas it was only 13 weeks this year.
Which doesn't change the fact their profit margin has dropped by around 15%.
An extra week would not have changed that.
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Old 24-01-2013, 01:09
The Lord Lucan
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They are paying for tooling in many of these factories to help increase supply. A heap of new products in one quarter with limited supply. You do the math.. It's gonna hurt profit, however they predicted that and it was hardly anything over last year!

I also agree that the shares were inflated and now are starting to correct themselves. However all said with the negativity... Most companies would kill to have the end of year Apple did.
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Old 24-01-2013, 01:12
Roush
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Which doesn't change the fact their profit margin has dropped by around 15%.
An extra week would not have changed that.
Have you even looked at the financials?

Profit per share: $13.81, versus $13.87 in the same quarter last year.

The drop in net profit percentage is due to the increase in operational costs and the stock buyback programme, and had been forecasted all along.
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Old 24-01-2013, 02:41
Step666
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They are paying for tooling in many of these factories to help increase supply. A heap of new products in one quarter with limited supply.
All of which are challenges and costs that other manufacturers have to overcome as well.
It doesn't change the fact it's a notable drop in their profit margin.

As for it being forecast, clearly the market expected Apple to overcome the challenges more effectively than they did.
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Old 24-01-2013, 09:02
DevonBloke
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They did say supply constraints were the biggest issue during Q4 all new products, production only just starting to ramp up. Still to this day on some products they have not caught up with demand and with 7 days less in this quarter than the same period the year before.

Never the less they are some crazy revenue figures.. Even just one minutes worth of sales would make my bank account look very rosy indeed!
Yes, and unlike when the iPhone 4 launched this time was different. I managed to get my preorder in when the Orange preorder website opened. My iPhone 5 turned up the day after launch. My wife didn't preorder and had to wait nearly a month to get hers. Clearly supply issues were a major cause of iPhone sales being weaker.
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Old 24-01-2013, 10:05
The Lord Lucan
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All of which are challenges and costs that other manufacturers have to overcome as well.
It doesn't change the fact it's a notable drop in their profit margin.

As for it being forecast, clearly the market expected Apple to overcome the challenges more effectively than they did.
That's actually incorrect as the other manufactures generally do not buy and own equipment for their suppliers. The other manufactures didn't have 4 or so new products to ramp up during Q4. Literally everything that could have been against them was and yet they still did amazingly well. This Q1 should see major sales from China.. so although they are forecasting nothing major I think they will be ok. I'm happy knowing my shares are still worth double what I bought them for..

Also a profit per share drop of -$0.06 is hardly anything to talking about!
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Old 24-01-2013, 11:04
spaceman05
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13.1b profit and the shareholders aint happy, they do realise that half the world was either in recession or just ciming out of it last year dont they, jeez what i would give just to have 1% of that profit
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Old 24-01-2013, 11:56
Stuart_h
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13.1b profit and the shareholders aint happy, they do realise that half the world was either in recession or just ciming out of it last year dont they, jeez what i would give just to have 1% of that profit
historically Apples success has been very fragile..... years of Boom (mostly with Jobs at the helm) followed by years of Bust (mostly without Jobs at the helm).

Lots of factors are causing concerns at the mo I would think:
1) No Steve Jobs
2) The rise of Android
3) The rise of Samsung
4) The lack of excitement around the iPhone5
5) The lack of excitement around the iPad Mini
6) Various political issues in the US around stock markets in general

As various people have stated Apple tend to release a 'wow' product every few years and are probably 'due' one fairly soon. If they manage to create a new 'wow' market then shares will rocket again. If they dont then the share will settle somewhere, probably lower than they currently are.

Im not sure where the 'wow' product will come from though ...
Apple TV ? is there really much more they can do than Smart TVs and Tivos ?
iWatch ? another rumour but there are already plenty on the market
Bigger iPhone (Math ??) ? I really dont believe this one but if its true it will be less than inspiring.

All of the above look much more like catch-up than innovation but what Apple have previously been great at is finding a 'new' area .... lets see what the next 12 months brings .....
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Old 24-01-2013, 12:10
The Lord Lucan
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I feel the TV product is a distraction from another product they are going to introduce.. unless the TV solution is so very different to what we currently have. Samsung etc have been in such a rush to try and saturate the market with every obvious form of smart tv.

Before the iPod was launched.. We're there rumours or leaks, not until just before.
Before the iPhone was launched.. We're there rumours or leaks, not until just before.
Before the iPad was launched.. We're there rumours or leaks, not until just before.

With all of these there was very little rumors before hand.. Only a few weeks before for the iSlate if I remember rightly.

Yes updated specs for new iPhones and iPads get leaked but that is because they ramp up production for these items before launch.. Where as new products they wait until near launch day or after! The iPad mini was an example leaks galore because it was already in production, I guess they didn't care as it wasn't relvolutionary and they needed to up supply before Christmas..

Apple could indeed spring a completely new product on us if they delay production like they used to and nobody would see it coming. I hope they do so.
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Old 24-01-2013, 12:29
Stuart_h
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I feel the TV product is a distraction from another product they are going to introduce.. unless the TV solution is so very different to what we currently have. Samsung etc have been in such a rush to try and saturate the market with every obvious form of smart tv.

Before the iPod was launched.. We're there rumours or leaks, not until just before.
Before the iPhone was launched.. We're there rumours or leaks, not until just before.
Before the iPad was launched.. We're there rumours or leaks, not until just before.

With all of these there was very little rumors before hand.. Only a few weeks before for the iSlate if I remember rightly.

Yes updated specs for new iPhones and iPads get leaked but that is because they ramp up production for these items before launch.. Where as new products they wait until near launch day or after! The iPad mini was an example leaks galore because it was already in production, I guess they didn't care as it wasn't relvolutionary and they needed to up supply before Christmas..

Apple could indeed spring a completely new product on us if they delay production like they used to and nobody would see it coming. I hope they do so.
is it as easy to sneak new products out these days ? so many leaks - both intentional and accidental.
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Old 24-01-2013, 12:46
The Lord Lucan
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Production supply (parts, manufacture and distribution) & Advertising material (box printing, tv photoshoots etc) are where most leaks are generated.

If it isn't in production there would be very little leaks. The iPhone 5 was in production for approx. 3 months before it was launched, as was the iPad mini.

The iPad Original went to production the same week as launch.

I'm not convinced that they do many intentional leaks.
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Old 24-01-2013, 12:50
Stuart_h
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Production supply (parts, manufacture and distribution) & Advertising material (box printing, tv photoshoots etc) are where most leaks are generated.

If it isn't in production there would be very little leaks. The iPhone 5 was in production for approx. 3 months before it was launched, as was the iPad mini.

The iPad Original went to production the same week as launch.

I'm not convinced that they do many intentional leaks.
I was being more general about the intentional leaks. im sure some companies use this tactic.
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Old 24-01-2013, 14:10
alanwarwic
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The iPhones still sold incredibly well though the 2012 and 2011 final quarters do not really compare easily.
Though there is a heck of lot of panic selling pre-market today.

There was little need to leak the iPhone 5 though the Mini got intentionally leaked almost right at Nexus 7 launch day.
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