SAN FRANCISCO—Apple Inc.'s stock price declined nearly 10 percent in after hours trading Wednesday (Jan. 23) after the firm projected sales would decline by more than 20 percent sequentially in the current quarter.
Apple (Cupertino, Calif.) reported its highest ever quarterly sales, $54.5 billion, for the quarter ended Dec. 29. Even so, sales were slightly below consensus analysts' expectations.
"No technology company has ever reported these kind of results," said Tim Cook, Apple's CEO, in a conference call with analysts following the financial report. "Apple is in one of the most prolific periods of innovation in new products in its history."
But Apple's stock price sank to $463.49 in after hours trading after closing at $514.01 earlier in the day, prior to the quarterly report.
Apple sold a record 47.8 million iPhones in the quarter, up 78 percent from the previous quarter and up 30 percent from the year-ago quarter. The company sold 22.9 million iPads, up from 15.4 million in the year-ago quarter. Mac sales declined to 4.1 million, down from 5.2 million in the year ago quarter, while iPod sales declined to 12.7 million compared to 15.4 million in the year-ago quarter, Apple said.
Paul McWilliams, editor of technology investment newsletter Next Inning Technology Research, was disappointed by Apple's quarterly report and the presentation by executives that followed. In a report circulated late Wednesday, McWilliams said he planned to sell his Apple shares in the near future after being "an Apple bull" for nearly 10 years.
"Apple was built on vision, innovation and a near perfect execution of design that delivered products that redefined some markets, and in other cases (many other cases) created entirely new markets," McWilliams wrote. "Today I view Apple as a huge ship that lacks not only a rudder, but also the forward vision needed to set the direction of the rudder."
Yeah, a company equipped with its own compiler, operating system, tool chain, API framework, even programming languages and many other not-so-profitable developers teams, earns at least my respect, compared to other 'manufacturers'.
W, Apple's ongoing success shows a huge population disagrees with you, that does not make them fools. The value of Apple's products is what people are willing to pay. There is more to great products than the BOM cost.
Of course, Apple always exceeds their own guidance. The analysts are the people who were coming up with earnings expectations far above what Apple indicates.
So, I've never understood this: the company beats its guidance, but doesn't beat the random numbers pulled out of the analysts' asses, and then the stock price gets punished?
Wall Street analysts are idiots. But we already knew that.
I believe the cash number is $137B, which represents almost 1/3 of it's share price.
The last paragraph of the story is of course history, but a really remarkable history -- "Apple's quarterly revenue of $54.5 billion was up 41 percent from the previous quarter and up 18 percent from the year-ago quarter. Apple's net profit for the quarter was $13.1 billion, or $13.81 per share, up 60 percent from the previous quarter and roughly flat with the year-ago quarter."
The fearful are dumping their shares at a huge discount, on a stock that was arguably already under-valued. I am anxiously waiting for a local minimum...
I don't pretend to understand financial markets but it seems to me Apple stock at it's current PE (price to earnings) ratio of about 10, is a relative bargin to the PE ratio of the S&P 500 index, currently at well over 16. It would seem to be a buying opportunity. Especially when you consider Apple reportedly has over 100 billion dollars in cash sitting around.
Another "bubble" bites the dust ??
Bubbles are inevitable when amateurs have access to day trading.
But even for them Apple's weaknesses ( total dependence on Suppliers / Competitors for critical components and technology, very little "secret sauce" that can't be replicated ) are finally sinking in.
To be able to get away with their high markup and maintain stock value, Apple needs totally new revolutionary products every 2 to 3 years.
Its been 3 years since the iPad.
Those are the analysts who brought the world economy to its knee a few years ago. Don't worry, you will have them as companions for many years to come. People like the CEOs of BoA, JP Morgan Chase, City Group, Goldman Sachs will keep feeding on the middle class in USA until the once-great nation becomes a ruin, all under the umbrella of free economy or whatever sound grand!
You are wrong. Apple's current lines of products are nothing innovative about. On the other hand, there will be many fools on earth who are willing to pay Apple $1 but are happy to get only $0.6 worth of goods (relative to other device makers like Nokia and Samsung) cents in return.
David Patterson, known for his pioneering research that led to RAID, clusters and more, is part of a team at UC Berkeley that recently made its RISC-V processor architecture an open source hardware offering. We talk with Patterson and one of his colleagues behind the effort about the opportunities they see, what new kinds of designs they hope to enable and what it means for today’s commercial processor giants such as Intel, ARM and Imagination Technologies.