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Apple Reports Fourth Quarter Results
- sgt 5y agoIsn't a $0.22 dividend per common share quite low?
- r0fl 5y agoSame as before. I’m surprised they didn’t increase it.
- abhv 5y agoDividends are not an efficient mechanism to return cash to investors. The recipient is forcefully taxed. Share buybacks technically accomplish the same; the proportional increase in shareholder value should be the same. However, investors who do not want to recognize income that year do not have to; whereas investors who need the dividend income can sell a small number of appreciated shares.
- rileymat2 5y agoI need to look at this more, but don’t dividends mostly return real current earnings where share buybacks are moving your return to future earnings which may never exist? Also, many people are harmed by this tax treatment because a couple making 80k a year pay no tax on the dividend capital gains? I am just saying dividends v share buybacks are not the same and have other effects.
- ghaff 5y agoYeah. They're different. Dividends give you cash on the barrel each quarter that is very sticky about heading in a downward direction--but tax treatment is pretty much like ordinary income in most cases. Stock buybacks may drive stock prices upwards in an unpredictable way that may lead to being able to sell appreciated stock in a tax-advantaged way a couple years out. Theoretically, it's all the same after tax effects but we don't live in that theoretical world.
- deleted 5y ago[deleted]
- colinmhayes 5y agoDividend tax rate is the same as capital gains rate which is what you pay when you sell your stock if you've held it for a year.
- bananabreakfast 5y agoThat's not true at all. Dividends are taxed as regular income, unless they're qualified dividends then they have their own rate.
- rileymat2 5y agoIf you hold the stock for more than a year it is part of the qualification, and with some exceptions most will be.
- hnfong 5y agoAFAIK, the situation is totally different for non-US tax residents (for those without a tax treaty with US anyway). Dividends are taxed at a flat 30% rate. Capital gains are not taxed by the US. At least that's my situation. Companies that pay heavy dividends are a substantially less attractive buy in my case.
- lotsofpulp 5y ago> Also, many people are harmed by this tax treatment because a couple making 80k a year pay no tax on the dividend capital gains? Really? I am only aware that at least long term capital gains tax applies to everyone for qualified dividends.
- rileymat2 5y agohttps://www.investopedia.com/ask/answers/12/how-are-capital-gains-dividends-taxed-differently.asp https://www.investopedia.com/ask/answers/12/how-are-capital-... For the 2020 tax year, you pay 0% on long-term capital gains if you have total income of $40,000 or less; 15% if you have income of $441,450 or less; and 20% if your income is greater than $441,450.
- lotsofpulp 5y agoInteresting, I never paid attention to that. I would guess the number of singles/couples earning $40k/$80k total per year or less and own enough stock to get material dividend income must be miniscule.
- statguy 5y agoLots of retired affluent people fall into that category. A $4M portfolio would throw off $80K in annual dividends assuming an average 2% dividend rate.
- lotsofpulp 5y agoA retired couple with $4M net worth excluding home value is 97th percentile. $1M is 90th percentile. And they surely would have a significant proportion of assets in bonds yielding a couple percent rather than stocks, so earning tens of thousands in only dividend income is probably super rare. https://dqydj.com/net-worth-percentile-calculator-united-states/ https://dqydj.com/net-worth-percentile-calculator-united-sta...
- deleted 5y ago[deleted]
- dkonofalski 5y agoI think, historically, Apple's dividends have been pretty low in general. Most of my dividends from other stocks are much higher.
- sz4kerto 5y agoGiven that tech companies don't tend to pay any dividends, it's good.
- syspec 5y agoYou have to take the recent split into account.
- oh_sigh 5y agoNo, since there was a 4:1 split last August. $0.22/share is historically high: https://investor.apple.com/dividend-history/default.aspx https://investor.apple.com/dividend-history/default.aspx
- jbverschoor 5y agoI don’t think it is. The dividend yield was in the 1.5-2% range about 10 years ago iirc.
- zsmi 5y agoThere was a 4:1 split in July, 2020 so it's comparable to the $0.82 dividend Apple was issuing earlier in 2020. https://investor.apple.com/dividend-history/default.aspx https://investor.apple.com/dividend-history/default.aspx
- deleted 5y ago[deleted]
- short12 5y agoWhy does apple use aspx? Not only is that strange but does anyone really use that anymore?
- marcellus23 5y agoApple uses Webex for meetings instead of some homegrown FaceTime, for the same reason — somebody else already built something that works.
- ericd 5y agoPerhaps they don't make their investor relations pages themselves? Not exactly core to their business.
- chrisseaton 5y agoIt's an off-the-shelf product. https://www.q4inc.com/products/investor-relations-websites/default.aspx https://www.q4inc.com/products/investor-relations-websites/d... Why do you think they should they make it themselves?
- Redoubts 5y agoWell, 1) That would be very on brand for Apple 2) They're already in the business of making complex web pages, and this is the only subdomain branded with this tech, so why special case it?
- chrisseaton 5y ago
- nabla9 5y agoThey use mostly share buybacks to return money to investors.
- MangoCoffee 5y ago>“This year we launched our most powerful products ever, from M1-powered Macs to an iPhone 13 lineup that is setting a new standard for performance and empowering our customers to create and connect in new ways,” said Tim Cook one platform for all their products. (one ring to rule them all) how much did Apple saved by going with their own in-house designed chip?
- jbverschoor 5y agoCost of products went from 70% to 66% and will only decrease I presume
- darwinwhy 5y agoThis is very good news for them, since their services revenue looks to be at risk due to antitrust scrutiny.
- syspec 5y agoYou keep repeating that, are you trying to will it into existence?
- kube-system 5y agoI think it's factual statement. When regulators are investigating one of your business practices, that is a business risk. https://www.reuters.com/technology/apple-likely-face-doj-antitrust-suit-information-2021-10-25/ https://www.reuters.com/technology/apple-likely-face-doj-ant... https://www.reuters.com/technology/exclusive-eu-antitrust-regulators-charge-apple-over-its-nfc-chip-tech-sources-2021-10-06/ https://www.reuters.com/technology/exclusive-eu-antitrust-re...
- quitit 5y agoI’d say both yes and no - Apple’s now booming services division (which includes the App Store) only started to produce meaningful revenue and profit after introducing a range of ancillary and subscription services. Absolutely agree that any change to their business model will be a hit on their revenue - but I believe people may be grossly over stating how much of Apple’s services division profit is coming from that 15/30% share. Running the app store is easily their most costly service and stable users aren’t in the habit of buying apps - but those people sure are paying their monthlies on iCloud/storage and music. (Also not to forget that apple get a cut from every Apple Pay transaction.)
- zsmi 5y ago> as we continue to make progress toward our goal of reaching a net cash neutral position over time Can someone more business savvy explain what that means?
- nabla9 5y agoIt means that they plan neither accumulate or decrease their net cash holdings. No dividends or stock buybacks to reduce cash, but no accumulating it either.
- deleted 5y ago[deleted]
- pdpi 5y agoApple has massive cash reserves that it can't really put to use. That cash isn't doing much of anything for anybody, so growing it any further is pointless. Going cash neutral here means "instead of uselessly adding to our cash reserves, we're going to aggressively dispose of our revenue", which presumably means dividends (they wouldn't have the cash reserves they do if they thought they had other productive ways to spend the money)
- Angostura 5y agoI suppose it could also mean increased investment in plant, R&D. aquisitions or reduced margins.
- smoldesu 5y agoI'd hope that money could be put towards researching ways to make their machines less fragile, or how to engineer an M.2 slot in a professional device with more than enough room. Maybe a thinner camera?
- brokencode 5y agoInfinite money doesn’t translate into infinite R&D, unfortunately. As pointed out by books like The Mythical Man Month, you can’t necessarily speed up development by adding more engineers/resources.
- klelatti 5y agoGross margin on the the increase in services sales looks astonishing. Has there been a one off increase in eg fees for Google search in services revenue?
- Synaesthesia 5y agoIt always had a lot of potential in terms of profitability, theoretically you can get the marginal cost of a digital item to nearly zero if you have a large scale.
- klelatti 5y agoAgreed but lots of Apple’s growing services don’t have low marginal costs - Apple Music - or they are investing heavily - Apple TV - so this seemed a bit surprising.
- deleted 5y ago[deleted]
- darwinwhy 5y agoServices revenue is at risk due to increased antitrust scrutiny worldwide. The more Apple focuses on services, the bigger the potential downside on their valuation.
- lvl100 5y agoiPhone 13 is not going to sell well. And while I believe they will sell a good amount of laptops this holiday season, they are relatively low margin products and do not represent cross selling opportunities as you do with phones. This is to say, Apple “needs” a new major product. Car is a moonshot but I personally think they can easily tackle the gaming space. They have all the right pieces to create $500B market cap.
- microtherion 5y ago> they can easily tackle the gaming space. They have all the right pieces to create $500B market cap Sony had their best year ever for Playstation sales in 2020, which translated to $20B of revenue.
- dano 5y agoIs that 500B in annual revenue maybe? Apples current market cap is $2.5T.
- 0x00000000 5y agoA VR/AR play seems inevitable too
- ghaff 5y agoAt some point, probably. Very unclear when and what it looks like at this point. Aside from niche commercial use cases, I certainly haven't seen anything that especially interests me.
- Gigachad 5y agoFor some reason Apple seems to pay no attention to anything other than casual games. They completely crippled the mac gaming scene which was doing OK when they killed 32bit and never implemented vulkan support. IMO they can't embrace VR without going back and helping the game developer scene in getting the tooling they need to make mac support easy.
- windowsrookie 5y agoThe iPhone 13 has a ~3 week shipping estimate right now. So it seems to be selling just fine. Maybe that's due to the chip shortage, but regardless, they are selling as many as they can make right now.
- throwaway4good 5y agoThere is a fairly big drop (-3.4%) in the after market. So I guess those results are a disappointment.
- compiler-guy 5y agoAfter hours trading is typically very low volume, so you can't conclude too many things from that result. It is one minor and very noisy indicator.
- klelatti 5y agoFT reporting that sales $6bn lower due to component shortages-that’s a substantial hit.
- systemvoltage 5y agoIs it possible that its not 100% shortage problem but rather a problem with Apple's iPhone business? It has been a decline for a while now. They have nowhere as big of a market share and generally they've shifted towards services as a hedge. Most discussions and news sites report shortage issues but I wonder if there is an underlying deeper reason.
- subsubzero 5y agoI agree, once alot of providers stopped offering subsidized prices for phones with contracts I feel like myself and others stopped buying a new iphone every 2 years. The larger models cost as much as a laptop and that is a really steep cost for the average American to deal with every 2 years.
- deleted 5y ago[deleted]
- lotsofpulp 5y agoThe phones also started stagnating in additional utility for new models. Smaller and smaller portions of people gain anything going from one model to the next. A $500 iPhone SE has plenty of camera and processing power for people, and it is basically an iPhone 8.
- megablast 5y agoIt’s been growing every year. How’s that a decline??
- systemvoltage 5y agoNo, it hasn't been growing. It has been stagnant and stuck at 14% for quite a while. Shouldn't we question whetever comes out of the shareholder's meeting? The classic is 2017 BTC boom that deluded NVidia's shareholders, no one questioned it and then in 2018, Jensen speaks up in the shareholders mtg that we're now in a Bitcoin hangover. Obviously, they've accelerated since then, but the point remains. It's important to play a devils advocate even if you're wrong. No one in this thread seems to be doing that. I really have no horse in this race, just putting out contrarian views from the herd.