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Apple Reports Third Quarter Results

74 points by yoda_sl 14y ago

jpxxx 14y ago
TL;DR: Exceeded guidance, no blowout. Mac sales are static, overall iPhone sales softening as the lineup ages, iPads surging, iPod continues to dwindle, miscellaneous sales remain miscellaneous. + stock buyback next year + dividends being issued as expected + China sales exploding So: a quiet quarter. New Mac OS released tomorrow. Yay!
- hristov 14y ago
  You forgot another one -- estimates missed.
  - thom 14y ago
    Made up analyst numbers are made up.
  - jpxxx 14y ago
    While a tragic piece of news for stock market analysts, that's not Apple news. :3
  - InclinedPlane 14y ago
    If you can make $8 billion profit in a single quarter and for some reasons the estimates where higher, that's a problem with the estimators, not with your business. In 2012 on the planet Earth averaging nearly $4 million in profit every single hour of every single day is tremendous business.
    - tazzy531 14y ago
      Sure, but the stock multiple prices in the estimates. If it can't meet the estimates, the stock is overvalued.
      - myspy 14y ago
        They beat their own estimates, but analysts are proven to be wrong all the time and the make up some numbers which don't reflect what really happens.
        diminish 14y ago
        Here is a better TL;DR. Apple, missed average estimates for most of the reported values for iPhone, Mac, EPS, revenues and profit margin, but beaten its own guidance, which is usually quite low. The stock price was down over 5% after markets. Most articles blame the next iPhone for the lower than expected sales. So In 1 year there are 4 quarters, and in the last 2 quarters misses on estimates are explained by rumours for the next iphone, this year and last year. Finally, will the current quarter also be worse for iPhone due next release approaching? Analysts; please be clever enough to take care of new releases in your estimates.
  - astrodust 14y ago
    They missed their whisper number, not their guidance.
Steko 14y ago
From Jacqui Cheng's liveblog of the call on ars: Q: Can you talk about what your conversations are like with carriers in terms of pricing, subsidies, etc.? Tim Cook: (laughing out loud) I don't want to talk about specifics with carriers, but generally I'd say our role is to make the very best smartphone in the world that has an incredible user experience that's far superior than anything else, that customers want to use every day at the end of the day, carriers want to provide what customers want to buy the most important thing for Apple is to continue making the best products in the world. we are maniacally focused on it
yoda_sl 14y ago
From the Press Release: the Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter
- jusben1369 14y ago
  This caught my eye. 26 million iPhones. Galaxy S III just did 10 million in 6 weeks since launch? That's 20 million in a quarter. Assume the iPhone number is a blended number too between older and latest model. So did we just see the first real example of one phone model legitimately challenge the iPhone? The argument was always that Android success was across so many phones. Now is the breaking down? Please don't flame me as hater or fan boy and just help me with the question of whether this is meaningful or flawed.
  - falling 14y ago
    This might be meaningful, but there are other factors to consider: - you are assuming the Galaxy sales will keep going at the same rate for 6 more weeks. certainly possible, but let’s wait two more months. - most companies talk about shipments to retailers, not sales. Apple is talking about real sales to customers. - summer iPhone sales slow down because a lot of people are expecting a new model in the fall.
  - spearo77 14y ago
    Is the Galaxy S III number "sold", or "shipped"?
  - bryne 14y ago
    A better comparison would be to a quarter introducing a new phone model - Apple sold 37.04 million iPhones in Q1 2012, the fiscal quarter during which the iPhone 4S launched.
    - 14y ago
smackfu 14y ago
Down 5% in after hours trading, although not sure if that is before or after results.
- pathdependent 14y ago
  The drop came after the results were reported.
- _delirium 14y ago
  Looks like after, due to being lower than the average analyst expectations... had been predicting $37b revenue, vs. actual report of $35b.
  - smackfu 14y ago
    They also missed the EPS by a dollar ($9.32 vs $10.35)
    - rkrishnakumar 14y ago
      They missed the analysts predicted revenue and EPS, but not their own guidance: revenue of $34 billion and earnings per diluted share of $8.68. Wall Street investors go bullish when iPhone sales slow, and bearish when sales are exploding.
      - adavies42 14y ago
        this is traditional: they almost always undershoot the over-expectations
        deleted 14y ago
        [deleted]
- MichaelApproved 14y ago
  A move like that, especially after hours, is almost always news (earnings in this case) related.
goatforce5 14y ago
The amount of the first dividend in a while has been set. "Apple's Board of Directors has declared a cash dividend of $2.65 per share of the Company's common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012."
vijayr 14y ago
Almost 43% gross margin, for a (mostly) hardware company !!
- endlessvoid94 14y ago
  I don't really understand how people keep calling Apple a hardware company. Yes, they make their own hardware (in some cases) but on the record, repeatedly, everyone at Apple says, all the time, that they treat themselves as a software company.
  - taligent 14y ago
    Says people who probably work in the software areas. The fact is Apple is a PRODUCT company. Meaning they do the software, hardware and most importantly everything in between the two.
  - deleted 14y ago
    [deleted]
  - mikeash 14y ago
    To call Apple a hardware or a software company is to miss the point entirely. Is Ford a wheel company or an engine company?
    - betterth 14y ago
      That's not fair, both wheels and engines are hardware ;) In all seriousness Apple isn't either. They make better software than any hardware company I know of, and better hardware than any software company I know.
      - mikeash 14y ago
        My point is that both wheels and engines are simply components of what Ford actually makes, which is cars. Likewise hardware and software are just components of what Apple actually makes. Totally agree that Apple isn't either, which was exactly my point.
goatforce5 14y ago
Oh... also buried in the release - Mountain Lion is released tomorrow: "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."
- deleted 14y ago
  [deleted]
mladenkovacevic 14y ago
I guess this week would be a good time to buy some AAPL and wait for the iPhone 5 frenzy.
asdfdsa1234 14y ago
Gross revenue and margin rose. Slow iPhone sales were the only weak spot in the report, which is unsurprising given the age of the current model.
- swalsh 14y ago
  The current model is less then a year old, I think the problem is people are waiting for 4g.
  - ceejayoz 14y ago
    With iPhones, "less than a year old" means "the new one's about to come out". My two year plan expired a few months back and I'm holding out for iPhone 5, and I suspect a lot of iPhone 4 purchasers are in the same boat.
    - wiredfool 14y ago
      AT&T was showing some slightly better results this quarter because they were showing fewer people with smartphones upgrading.
    - heretohelp 14y ago
      >I'm holding out for iPhone 5, and I suspect a lot of iPhone 4 purchasers are in the same boat. Yep. Hi. *waves from a 3g-only Verizon iPhone 4 :(
      - zcvosdfdgj 14y ago
        aww... I'm holding an ATT iPhone 4s that says "4g". Maybe Verizon should make the appropriate payment to Apple for an "upgrade"? http://www.pcmag.com/article2/0,2817,2401422,00.asp http://www.pcmag.com/article2/0,2817,2401422,00.asp
  - CamperBob2 14y ago
    Not really, as it's only a minor refresh of the original iPhone 4 from most users' point of view.
jsz0 14y ago
I'm surprised the Mac grew at all given how late in the quarter they updated the notebooks plus no desktop updates at all. I guess it just proves how little people really care about spec sheets anymore -- or maybe they made it all up at the end of the quarter with the new notebooks?
jusben1369 14y ago
I think this is a great concise view on the numbers. 23% revenue growth vs Google 21%.... http://www.splatf.com/2012/07/apple-jun12earnings-charts/ http://www.splatf.com/2012/07/apple-jun12earnings-charts/
thechut 14y ago
What a bunch of fanboys... They missed their estimates and stocks tumbled 6% in after hours trading. That's $33, more than 10 times the dividends they will be paying on that $8B profit.
- polycom 14y ago
  How did they miss their estimates?
  - btilly 14y ago
    The market was trading on a belief that Apple's numbers would be about $2 billion higher than they were. Therefore the stock will fall as people digest the number and re-evaluate where Apple should be trading. Since they reported numbers that were in the neighborhood of 6% below what was expected, their stock fell about 6%. Which is a pretty large drop.
  - thechut 14y ago
    "Apple said its earnings per share were $9.32 on revenue of $35 billion. Analysts polled by Thomson One Analytics predicted earnings per share of $10.36 on revenue of $37.19 billion." Via http://www.mercurynews.com/breaking-news/ci_21147940/apples-third-quarter-earnings-misses-wall-streets-expectations http://www.mercurynews.com/breaking-news/ci_21147940/apples-... It doesn't matter how much money you actually make when you are as big as Apple, it matters what you make compared to what people (analysts) think and expect you to make. Edit: Put wrong quarter numbers, fixed.
    - polycom 14y ago
      You said "their estimates" which I took to mean Apples own estimates. Isn't it tradition for Apple to beat their own estimates, fail to meet analysts estimates, and having their shares drop for a period of time afterwards? I'm not a trader though so correct me if I'm wrong.
      - astrodust 14y ago
suprgeek 14y ago
Inspite of being the most valuable company on Earth and making an amazing profit by any metric - you still lose value (stock price) if you come in under "analyst" estimates. The relentless march of capital may be increasingly going off the rails.
- AlisdairO 14y ago
  It makes perfect sense. If you're widely expected to make a lot of money, people will price that into your stock. If you make a lot minus n, you're doing less well than the analysts expected, and so your stock is overvalued. The failing here is not that the stock price dropped on results that were worse than the market expected, it's that the market expected too much in the first place, causing the stock to become overvalued.
  - ubernostrum 14y ago
    If it happened once, sure. The thing is, analysts have shown, historically, that either: 1) They are really, really bad at their jobs to have such a consistent track record of producing poor estimates for Apple, or 2) They are really, really good at their jobs, but the jobs they're doing aren't the jobs we think they're doing.
    - AlisdairO 14y ago
      > The failing here is not that the stock price dropped on results that were worse than the market expected, it's that the market expected too much in the first place, causing the stock to become overvalued. I don't really see how what I said disagrees with what you said - what I was pointing out was that a stock price falling when the company fails to meet expectations is good and rational behaviour. The problem is the bad analytics that caused the inflated expectations in the first place. Feel free to speculate as to the cause of that as you wish :-).

74 points by yoda_sl 14y ago

jpxxx 14y ago

TL;DR: Exceeded guidance, no blowout. Mac sales are static, overall iPhone sales softening as the lineup ages, iPads surging, iPod continues to dwindle, miscellaneous sales remain miscellaneous. + stock buyback next year + dividends being issued as expected + China sales exploding So: a quiet quarter. New Mac OS released tomorrow. Yay!

hristov 14y ago
You forgot another one -- estimates missed.
- thom 14y ago
  Made up analyst numbers are made up.
- jpxxx 14y ago
  While a tragic piece of news for stock market analysts, that's not Apple news. :3
- InclinedPlane 14y ago
  If you can make $8 billion profit in a single quarter and for some reasons the estimates where higher, that's a problem with the estimators, not with your business. In 2012 on the planet Earth averaging nearly $4 million in profit every single hour of every single day is tremendous business.
  - tazzy531 14y ago
    Sure, but the stock multiple prices in the estimates. If it can't meet the estimates, the stock is overvalued.
    - myspy 14y ago
      They beat their own estimates, but analysts are proven to be wrong all the time and the make up some numbers which don't reflect what really happens.
      - diminish 14y ago
        Here is a better TL;DR. Apple, missed average estimates for most of the reported values for iPhone, Mac, EPS, revenues and profit margin, but beaten its own guidance, which is usually quite low. The stock price was down over 5% after markets. Most articles blame the next iPhone for the lower than expected sales. So In 1 year there are 4 quarters, and in the last 2 quarters misses on estimates are explained by rumours for the next iphone, this year and last year. Finally, will the current quarter also be worse for iPhone due next release approaching? Analysts; please be clever enough to take care of new releases in your estimates.
- astrodust 14y ago
  They missed their whisper number, not their guidance.

Steko 14y ago

From Jacqui Cheng's liveblog of the call on ars: Q: Can you talk about what your conversations are like with carriers in terms of pricing, subsidies, etc.? Tim Cook: (laughing out loud) I don't want to talk about specifics with carriers, but generally I'd say our role is to make the very best smartphone in the world that has an incredible user experience that's far superior than anything else, that customers want to use every day at the end of the day, carriers want to provide what customers want to buy the most important thing for Apple is to continue making the best products in the world. we are maniacally focused on it

yoda_sl 14y ago

From the Press Release: the Company sold 26.0 million iPhones in the quarter, representing 28 percent unit growth over the year-ago quarter. Apple sold 17.0 million iPads during the quarter, an 84 percent unit increase over the year-ago quarter. The Company sold 4.0 million Macs during the quarter, a two percent unit increase over the year-ago quarter. Apple sold 6.8 million iPods, a 10 percent unit decline from the year-ago quarter

jusben1369 14y ago
This caught my eye. 26 million iPhones. Galaxy S III just did 10 million in 6 weeks since launch? That's 20 million in a quarter. Assume the iPhone number is a blended number too between older and latest model. So did we just see the first real example of one phone model legitimately challenge the iPhone? The argument was always that Android success was across so many phones. Now is the breaking down? Please don't flame me as hater or fan boy and just help me with the question of whether this is meaningful or flawed.
- falling 14y ago
  This might be meaningful, but there are other factors to consider: - you are assuming the Galaxy sales will keep going at the same rate for 6 more weeks. certainly possible, but let’s wait two more months. - most companies talk about shipments to retailers, not sales. Apple is talking about real sales to customers. - summer iPhone sales slow down because a lot of people are expecting a new model in the fall.
- spearo77 14y ago
  Is the Galaxy S III number "sold", or "shipped"?
- bryne 14y ago
  A better comparison would be to a quarter introducing a new phone model - Apple sold 37.04 million iPhones in Q1 2012, the fiscal quarter during which the iPhone 4S launched.
  - 14y ago

smackfu 14y ago

Down 5% in after hours trading, although not sure if that is before or after results.

pathdependent 14y ago
The drop came after the results were reported.
_delirium 14y ago
Looks like after, due to being lower than the average analyst expectations... had been predicting $37b revenue, vs. actual report of $35b.
- smackfu 14y ago
  They also missed the EPS by a dollar ($9.32 vs $10.35)
  - rkrishnakumar 14y ago
    They missed the analysts predicted revenue and EPS, but not their own guidance: revenue of $34 billion and earnings per diluted share of $8.68. Wall Street investors go bullish when iPhone sales slow, and bearish when sales are exploding.
    - adavies42 14y ago
      this is traditional: they almost always undershoot the over-expectations
      - deleted 14y ago
        [deleted]
MichaelApproved 14y ago
A move like that, especially after hours, is almost always news (earnings in this case) related.

goatforce5 14y ago

The amount of the first dividend in a while has been set. "Apple's Board of Directors has declared a cash dividend of $2.65 per share of the Company's common stock. The dividend is payable on August 16, 2012, to stockholders of record as of the close of business on August 13, 2012."

vijayr 14y ago

Almost 43% gross margin, for a (mostly) hardware company !!

endlessvoid94 14y ago
I don't really understand how people keep calling Apple a hardware company. Yes, they make their own hardware (in some cases) but on the record, repeatedly, everyone at Apple says, all the time, that they treat themselves as a software company.
- taligent 14y ago
  Says people who probably work in the software areas. The fact is Apple is a PRODUCT company. Meaning they do the software, hardware and most importantly everything in between the two.
- deleted 14y ago
  [deleted]
- mikeash 14y ago
  To call Apple a hardware or a software company is to miss the point entirely. Is Ford a wheel company or an engine company?
  - betterth 14y ago
    That's not fair, both wheels and engines are hardware ;) In all seriousness Apple isn't either. They make better software than any hardware company I know of, and better hardware than any software company I know.
    - mikeash 14y ago
      My point is that both wheels and engines are simply components of what Ford actually makes, which is cars. Likewise hardware and software are just components of what Apple actually makes. Totally agree that Apple isn't either, which was exactly my point.

goatforce5 14y ago

Oh... also buried in the release - Mountain Lion is released tomorrow: "We've also just updated the entire MacBook line, will release Mountain Lion tomorrow and will be launching iOS 6 this Fall. We are also really looking forward to the amazing new products we've got in the pipeline."

deleted 14y ago
[deleted]

mladenkovacevic 14y ago

I guess this week would be a good time to buy some AAPL and wait for the iPhone 5 frenzy.

asdfdsa1234 14y ago

Gross revenue and margin rose. Slow iPhone sales were the only weak spot in the report, which is unsurprising given the age of the current model.

swalsh 14y ago
The current model is less then a year old, I think the problem is people are waiting for 4g.
- ceejayoz 14y ago
  With iPhones, "less than a year old" means "the new one's about to come out". My two year plan expired a few months back and I'm holding out for iPhone 5, and I suspect a lot of iPhone 4 purchasers are in the same boat.
  - wiredfool 14y ago
    AT&T was showing some slightly better results this quarter because they were showing fewer people with smartphones upgrading.
  - heretohelp 14y ago
    >I'm holding out for iPhone 5, and I suspect a lot of iPhone 4 purchasers are in the same boat. Yep. Hi. *waves from a 3g-only Verizon iPhone 4 :(
    - zcvosdfdgj 14y ago
      aww... I'm holding an ATT iPhone 4s that says "4g". Maybe Verizon should make the appropriate payment to Apple for an "upgrade"? http://www.pcmag.com/article2/0,2817,2401422,00.asp http://www.pcmag.com/article2/0,2817,2401422,00.asp
- CamperBob2 14y ago
  Not really, as it's only a minor refresh of the original iPhone 4 from most users' point of view.

jsz0 14y ago

I'm surprised the Mac grew at all given how late in the quarter they updated the notebooks plus no desktop updates at all. I guess it just proves how little people really care about spec sheets anymore -- or maybe they made it all up at the end of the quarter with the new notebooks?

jusben1369 14y ago

I think this is a great concise view on the numbers. 23% revenue growth vs Google 21%.... http://www.splatf.com/2012/07/apple-jun12earnings-charts/ http://www.splatf.com/2012/07/apple-jun12earnings-charts/

thechut 14y ago

What a bunch of fanboys... They missed their estimates and stocks tumbled 6% in after hours trading. That's $33, more than 10 times the dividends they will be paying on that $8B profit.

polycom 14y ago
How did they miss their estimates?
- btilly 14y ago
  The market was trading on a belief that Apple's numbers would be about $2 billion higher than they were. Therefore the stock will fall as people digest the number and re-evaluate where Apple should be trading. Since they reported numbers that were in the neighborhood of 6% below what was expected, their stock fell about 6%. Which is a pretty large drop.
- thechut 14y ago
  "Apple said its earnings per share were $9.32 on revenue of $35 billion. Analysts polled by Thomson One Analytics predicted earnings per share of $10.36 on revenue of $37.19 billion." Via http://www.mercurynews.com/breaking-news/ci_21147940/apples-third-quarter-earnings-misses-wall-streets-expectations http://www.mercurynews.com/breaking-news/ci_21147940/apples-... It doesn't matter how much money you actually make when you are as big as Apple, it matters what you make compared to what people (analysts) think and expect you to make. Edit: Put wrong quarter numbers, fixed.
  - polycom 14y ago
    You said "their estimates" which I took to mean Apples own estimates. Isn't it tradition for Apple to beat their own estimates, fail to meet analysts estimates, and having their shares drop for a period of time afterwards? I'm not a trader though so correct me if I'm wrong.
    - astrodust 14y ago

suprgeek 14y ago

Inspite of being the most valuable company on Earth and making an amazing profit by any metric - you still lose value (stock price) if you come in under "analyst" estimates. The relentless march of capital may be increasingly going off the rails.

AlisdairO 14y ago
It makes perfect sense. If you're widely expected to make a lot of money, people will price that into your stock. If you make a lot minus n, you're doing less well than the analysts expected, and so your stock is overvalued. The failing here is not that the stock price dropped on results that were worse than the market expected, it's that the market expected too much in the first place, causing the stock to become overvalued.
- ubernostrum 14y ago
  If it happened once, sure. The thing is, analysts have shown, historically, that either: 1) They are really, really bad at their jobs to have such a consistent track record of producing poor estimates for Apple, or 2) They are really, really good at their jobs, but the jobs they're doing aren't the jobs we think they're doing.
  - AlisdairO 14y ago
    > The failing here is not that the stock price dropped on results that were worse than the market expected, it's that the market expected too much in the first place, causing the stock to become overvalued. I don't really see how what I said disagrees with what you said - what I was pointing out was that a stock price falling when the company fails to meet expectations is good and rational behaviour. The problem is the bad analytics that caused the inflated expectations in the first place. Feel free to speculate as to the cause of that as you wish :-).