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Apple Q4 Results

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Re: Apple Q4 Results

#51

Post by tclancy »

microtherion wrote: post #39
privateSFacct wrote: post #9

Earlier quoted context omitted.

The history is that apple had a crazy cash position partly because of the need to keep cash overseas to avoid tax on repatriation. What they did was borrow against that overseas cash to get US based on dollars. Cash neutral doesn't relate to growth, if you grew you'd need to increase cash to cover working capital needs generally (ie, Apple first has to pay for parts, inventory, factories, staff for them etc before it…

Not only is excess cash not very useful, I'd argue that it can be actively harmful, as it makes the company a target for a leveraged buyout. Though maybe this does not apply to Apple, as a potential buyout would have to be about 30x as large as the largest leveraged buyout in history.

Yeah, lots of cash leaves you vulnerable to greenmail, but when you have the most cash, you’re probably ok.

Re: Apple Q4 Results

#52

Post by will4274 »

throwaway5752 wrote: post #19
jjtheblunt wrote: post #13

Earlier quoted context omitted.

Why do you say the company has to grow?

At a least keep up with inflation in order to have future value? I'm almost didn't write this because I didn't want to deal with the "why do we have to grow" responses. If you are a single proprietorship then go nuts. Do what you want. If you take investor money you are an investment, and you are legally obligated (at top levels, via fiduciary obligations) to operate things to generate return. That's also why you hav…

> Or the owners will fire the executives, or shareholder groups might vote for takeovers that offer greater returns.

It's worth emphasizing this point because it's a common misconception. Companies don't have a legal obligation to grow - they have a legal obligation to do what their investors want. But being publicly traded virtually gaurentees that your company is owned by people who want it grow or will be owned by people who want it to grow.

Re: Apple Q4 Results

#53

Post by SlowRobotAhead »

ogre_codes wrote: post #26
mikece wrote: post #12

Is it too early to tell how much the Apple Card contributes to Apple's revenue?

Apple Card is likely one of those services which will have little impact on revenue and earning, but outsized impact on stickiness of the iPhone as a platform. If you prefer Apple Card and the way you interact with it, it's going to be that much tougher to move to Android.

Have I missed some feature of the Apple Card that exclusively ties with Apple Pay (nfc)?

I love Apple Pay, have all my cards in Wallet, don’t have an Apple Card. So I don t see how it’s a lock-in feature.

Re: Apple Q4 Results

#54

Post by dodobirdlord »

freehunter wrote: post #35
Godel_unicode wrote: post #21

Earlier quoted context omitted.

Giving the companies profits to the people who own the company is not "financial engineering". Apple has decided it cannot effectively use that money for R&D, so it isn't

Stock buybacks may be a way to give profits to the people who own the company, but they are also 100% financial engineering considering it has a direct impact on stock price and earnings per share. Stock buybacks were illegal until 1982, being considered a form of stock manipulation. Even though it's legal now, it's still one of the best forms of stock manipulation.

> it has a direct impact on stock price

A company buying its own stock at market price is a wash. The reduction in the value of the company and the increase in the value of each remaining share balance out.

Re: Apple Q4 Results

#55

Post by privateSFacct »

pazimzadeh wrote: post #50
privateSFacct wrote: post #9

Earlier quoted context omitted.

The history is that apple had a crazy cash position partly because of the need to keep cash overseas to avoid tax on repatriation. What they did was borrow against that overseas cash to get US based on dollars. Cash neutral doesn't relate to growth, if you grew you'd need to increase cash to cover working capital needs generally (ie, Apple first has to pay for parts, inventory, factories, staff for them etc before it…

Well, they should have repatriated it. The only reason they're not is because they're hoping to get a one-time tax cut from a Republican administration, and with the amount of money involved it was worth it to wait out Obama, who wouldn't have any of it.

The way they handled it was to borrow funds using the cash as collateral.

They could put $1B in Bank X, then would borrow $1B from Bank X, using their cash in Bank X as security. If you squint it might almost look like they were borrowing their own money :).

I'm not that onto the details here so this might be totally wrong - but I didn't wonder why Apple had so much debt one time and this is what I think I was looking at.

One risk if they didn't repay and the bank took collateral would be that they would then have had to pay the taxes (it would have counted as a repatriation). They must have thought the risk was reasonably low.

Re: Apple Q4 Results

#56

Post by privateSFacct »

microtherion wrote: post #39
privateSFacct wrote: post #9

Earlier quoted context omitted.

The history is that apple had a crazy cash position partly because of the need to keep cash overseas to avoid tax on repatriation. What they did was borrow against that overseas cash to get US based on dollars. Cash neutral doesn't relate to growth, if you grew you'd need to increase cash to cover working capital needs generally (ie, Apple first has to pay for parts, inventory, factories, staff for them etc before it…

Not only is excess cash not very useful, I'd argue that it can be actively harmful, as it makes the company a target for a leveraged buyout. Though maybe this does not apply to Apple, as a potential buyout would have to be about 30x as large as the largest leveraged buyout in history.

What is impressive in some ways is their spending discipline with this mountain of cash. Many business have tried to buy their way to growth with horrible results in my view.

Re: Apple Q4 Results

#57

Post by pfeller »

scarface74 wrote: post #44
gigatexal wrote: post #17

Net income was? Also this BS about stock buybacks and dividends to become cash neutral is stupid. They should be betting on moonshot things that will be the next iPhone instead of all of this financial engineering.

Even in 2007 when the iPhone was introduced, Jobs said he wanted Apple to have 1% of the phone market and sell $10 million. That means the phone market was already at 1 billion per year. Now it’s at 4+ billion per year. Getting in the phone market was obvious even back then. Almost by definition, there won’t be a larger market than one that already has 80%* market penetration among adults worldwide.

think you mixed some billion phones and billion dollars a bit here but got the point.

Re: Apple Q4 Results

#58

Post by pertymcpert »

SlowRobotAhead wrote: post #53
ogre_codes wrote: post #26

Earlier quoted context omitted.

Apple Card is likely one of those services which will have little impact on revenue and earning, but outsized impact on stickiness of the iPhone as a platform. If you prefer Apple Card and the way you interact with it, it's going to be that much tougher to move to Android.

Have I missed some feature of the Apple Card that exclusively ties with Apple Pay (nfc)? I love Apple Pay, have all my cards in Wallet, don’t have an Apple Card. So I don t see how it’s a lock-in feature.

It's not Apple Pay, it's the wallet. You used the wallet to track spending and pay it off, and collect the cash back.

Re: Apple Q4 Results

#59

Post by tempsy »

newshorts wrote: post #34
tempsy wrote: post #23

Definitely my best stock pick of the year.

It was good, but everything went up this year. It was extremely easy if you bought the dip last dec. I’m waiting for another dip... hoping to cash in. Might be waiting a while after this earnings report & fed announcement today.

Everything is easy in hindsight.

Re: Apple Q4 Results

#60

Post by bradhe »

selectodude wrote: post #16
bradhe wrote: post #14

> revenue between $85.5 billion and $89.5 billion A $4B margin is a pretty big margin...

The target is $87.5 billion +/- 2.5 percent. Seems pretty reasonable to me.

Totally reasonable, especially for a company like apple! In real terms, it ends up being like half a WeWork.
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