61–70 of 77 posts
Damn net profit of 7.5billion is now lower than samsung's 8.13billion.
"...someone pointed out that Kovach was comparing Apple's after tax net income to Samsung Electronics pre-tax operational income..."
typical mistake...
http://tech.fortune.cnn.com/2013/07/28/apple-samsung-profits...
Damn net profit of 7.5billion is now lower than samsung's 8.13billion.
No way to hide this: 2013: Revenue $37.5B, Profit $7.5B (20%) 2012: Revenue $36.0B, Profit $8.2B (22%) Loss of 2% net profit year over year. Just under a 5% drop per share on a diluted basis. So its becoming less profitable to be Apple which speaks to the margin pressure they are under from credible Android phones and tablets. I don't think the market expected that (or maybe they did, GOOG is trading over $1000 these…
Second, is this is really key, is that they started deferring more revenue because they are starting to give software away for free.
They guided for 36.5-37.5% margin in the next quarter and the stock tanked $30 after hours because the street wanted 37-38%. They then explained that they are going to defer an extra 900Mil of revenue on Mac and iOS because of moving the software to free. Without that, the revenue range would have been higher and the margin guide would have been closer to 38.5%. So they beat expectations for revenue, margin, and profit both this quarter and in guidance for next quarter, yet the stock tanked on release.
Once they mentioned this in the conference call, the stock regained all the losses and actually was up after hours for a bit. Now it's back down, but only slightly. I suspect just because more people are looking at the headlines and not reading or listening to the whole call.
Now, overall the margins are still lower this quarter than they were last quarter, but I don't see that as a huge problem. They changed the product mix. They had higher total revenue, large growth in total iPhone sales, and guided to revenue and profit growth for next quarter. They are still in pretty good shape. Oh and they have 150 bil in cash.
Shares trading down 3% in AH.
Damn net profit of 7.5billion is now lower than samsung's 8.13billion.
"Samsung has not 'dethroned' Apple in profits" "...someone pointed out that Kovach was comparing Apple's after tax net income to Samsung Electronics pre-tax operational income..." typical mistake... http://tech.fortune.cnn.com/2013/07/28/apple-samsung-profits...
I'm using net income, Samsung has 9.6 operating profit. Why are you showing an article from last quarter?
Earlier quoted context omitted.
Samsung's profits are up mainly because of chips which makes sense when they're manufacturing Apple's chips (and Apple's iPhone sales are up significantly). Samsung's growth in high-end phone sales is slowing down. http://www.bloomberg.com/news/2013-10-24/samsung-profit-surg...
No the $6.3B is from the mobile division alone. Their chip sales also saw profits of about $1.9B which is double than same time last year, but the phone sales are still their #1 business.
As someone who has to buy Apple devices for work, I'm hoping they get some pressure to drop their prices, especially on MBPros. My next one will probably cost a bomb since the new ones don't let you stick in third party ram - though the SSD is replacable (with considerable effort)
Is replacing the SSD more effort now? It took maybe 10 minutes on my 2009 MBP to replace the stock HDD with an SSD & yank the optical drive for a second hdd.
No way to hide this: 2013: Revenue $37.5B, Profit $7.5B (20%) 2012: Revenue $36.0B, Profit $8.2B (22%) Loss of 2% net profit year over year. Just under a 5% drop per share on a diluted basis. So its becoming less profitable to be Apple which speaks to the margin pressure they are under from credible Android phones and tablets. I don't think the market expected that (or maybe they did, GOOG is trading over $1000 these…
There are several things at play here. First, the iPad mini didn't exist last year, and it is a lower margin product by design. Second, is this is really key, is that they started deferring more revenue because they are starting to give software away for free. They guided for 36.5-37.5% margin in the next quarter and the stock tanked $30 after hours because the street wanted 37-38%. They then explained that they are…
Overall gross margin is a blend of all your products, that gross margin is where you get the money for everything you do, pay salaries, buy capital equipment, etc. So it really doesn't matter if your margin is lower because you are shipping more inexpensive product (the mix), all that matters is that its lower. That changes the amount of revenue you must have to run the business and increases downside risk if you are close to the edge (as Dan Warmenhoven is famous for saying, you have much more control over margin than you do over revenue).
In the case of the iPad Mini it says that additional growth in the Tablet market is in the lower margin segment. That is accretive if you're holding on to your existing market share at the high end, and dilutive if you're losing high end share to the mid-range or bargain products. Same with phones, lets say the 5C turns out to be "good enough" and sales of the 5S plummet because it's extra cost (and margin) isn't "valuable" enough to the consumer to pay the extra money. Now you have to sell a lot more units to get the same profit, but that requires more "business" (and by that I mean more assemblers, more sales people, more trucks driving around, more logistics, etc.) You lower the price (which increases sales rate, but that also reduces margin, so you have to sell more to make the same amount.
Now I don't think Apple is anywhere near any of that, they are a very strong company with a solid brand. My observation is that the reduction in overall gross margin will come out of the business, whether it fewer product managers for more products, or lower salaries for retail staff, or what, the numbers have to balance.
No way to hide this: 2013: Revenue $37.5B, Profit $7.5B (20%) 2012: Revenue $36.0B, Profit $8.2B (22%) Loss of 2% net profit year over year. Just under a 5% drop per share on a diluted basis. So its becoming less profitable to be Apple which speaks to the margin pressure they are under from credible Android phones and tablets. I don't think the market expected that (or maybe they did, GOOG is trading over $1000 these…
Then we have the new iMac which also faced some supply problems and delays and offered customers something they probably didn't even care about -- a thinner desktop all-in-one PC. IIRC the Ivy Bridge update to the Mac Mini eliminated a SKU that offered a semi-decent GPU. Then Apple disappeared for a very long time and later in the year introduced Haswell updates to only the MacBook Airs leaving informed MacBook Pro would-be buyers facing old technology with a premium price tag.
Next we have the iPhone 5C which in most ways is a step backwards from the premium quality iPhone 4S (or would be iPhone 5) that occupied that price point. Contract free the device is totally non-competitive on pricing compared to better Android devices. The 5S was quite a good -S model upgrade however consumers are starting to get wise to the tick tock strategy and perhaps are choosing to wait for the iPhone 6 upgrade.
I've been watching Apple for quite a while now and FY2013 was not a great year for product upgrades. I'm actually kind of surprised they only took a 2% hit on profits.
Earlier quoted context omitted.
However Apple's product release schedule being as rigorous as it is tends to make quarters more comparable. Perhaps a better indication here is the drop from 40% gross margins to 37% gross margins. That comes right out of the business. Generally lower revenues but same margins is a sign so constraints in the supply chain. Higher revenue but lower profits is a sign of margin erosion. Lower revenue and lower profits an…
Chuck, If you really think that Apple will drop like that, you should short it.