SEC regulators giving Apple a pass on disclosures?

Apple Store“When I first started raising some questions about Apple last June, the part of the story I kept hammering away at was the way it reports its operating segments. Unlike its competitors, aside from its retail operations, Apple reports operating segments by geography rather than business unit,” Herb Greenberg blogs for MarketWatch.

Greenberg writes, “Considering that Apple is no longer just a personal computer company, I was convinced that after the SEC did a scrub of its accounting recently, one change would more detail on segments by business lines (computers, music and, soon, mobile telephones.)”

“But in two recent 10-Qs, Apple has continued to report segments the way it always has, shedding little light on the profitablity of such businesses as the i-Pod or i-Tunes — something investors ask about repeatedly on earnings conference calls,” Greenberg writes.

Greenberg asks, “Could it be that regulators are giving the company a pass?”

Full article here.

23 Comments

  1. Why would they need to be THAT specific? They aren’t hiding anything, just leaving specific segment numbers vague, I’d bet to hide from competitors their business agreements with the music companies and suppliers.

  2. Oh no. We don´t need more of these besserwisser types at the next shareholder meeting. The information that Apple provides is more than ok if you read it carefully and know what you are looking for. There are some segments that might not be profitable yet, but they will be soon. What pisse me off is these analysts that can´t understand what Apple is doing and where it is heading.

  3. What about Microsoft? Their advertising and lawyering budgets are conflated all the time. This latest bout of lawyering, Linux patents, well that’s really marketing as we all know. And what happened to the $500 million marketing for the Vista launch, I didn’t see anything that cost anywhere near that, maybe it was all the behind the scenes backhanders or even better still free copies of Vista they could claim as sales. And those keyboard and mouse sales, those are advertising. Putting their brand name between the user and the screen, no wonder they are the only Microsoft products that are good and reasonably priced.

    What have shareholders done about the profitability of Xbox (soon to be ex-box), and all the other Micorosft failures, nada

  4. Actually, he probably cannot buy/own any shares of Apple and then report on it. Without strict and obvious disclosures.

    Second, I have no problem with the critism, take it for what it is worth. Draw your own conclusions. Apple acknowledged a back dating options problem in its own internal audit.

    Funny things happen when the money flow seems plentiful and endless. Now I am not insuating that anything in “rotten in … Denmark,” just that people tend to be more forgiving of minor inconsistencies so long as, as a whole, the entity is moving in a positive direction.

  5. Look. You can’t separate the iPod, iPhone and TV from the computer and software side.

    Without the software, the iPod, iPhone and TV are just expensive pieces of tech-no-trash.

    Everything Apple makes is part of the computer and software side of the business including the brick and mortar stores.

  6. @ Buster
    Wishing aint gonna make it happen ’till someone can figure a way to cut the Oil companies CEO’s “perk packages”
    Until that happens .. expect to be paying more at the pump !

  7. Big Al: “You can’t separate the iPod, iPhone and TV from the computer and software side.”

    This is nonsense and untrue.

    Microsoft tried to make a very similar argument about Internet Explorer being tied to the operating system, when the U.S. Department of Justice was suing them on antitrust grounds.

    You’re confusing the technical relationships with the financial ones.

    The issue being discussed here is how Apple chooses to report its sales and profits, not whether an iPhone runs Mac OS X internally or not.

  8. LinuxGuy,

    Why is that almost every post from you is spewing bile, hate, and venom?

    If you disagree with Herb Greenberg on the merits of the underlying issue, why not explain your reasons and your perspective?

    You’re disguising your intelligence and undermining your credibility when you post in such a childish manner.

    Try again.

  9. I can understand why analysts want more detailed figures. But I can also see why Apple isn’t going to release them.

    With things as they are, the analysts invent figures, make stupid predictions and come to the wrong conclusion every time. Nevertheless, some investors are influenced by this sort of nonsense and the share price gets affected.

    If the analysts had access to more detailed figures, they would make increasingly detailed wrong predictions. There’s no benefit to that at all from Apple’s perspective.

    Apple don’t have anything to hide, but there is no advantage in disclosing too much detail. They are making healthy profits on multiple ventures, so why does it matter exactly which department contributes each cent to that overall sum ? Obviously Apple know all that and use such figures internally and the way Apple is run makes it quite obvious that every department is expected to contribute handsomely to Apple’s fortunes.

    As one who has a significant investment in Apple, I would not want any sort of change that would create pressure to deliver on short term goals. I’m perfectly happy to let projects develop and bear fruit in a sensible timescale, something which the analysts show no understanding of.

    It’s not as though Apple’s financial results give cause for concern to anybody other than Apple’s rivals, or those who sold their AAPL investments and since watched the value continue to rise.

  10. I don’t think that Apple’s product line has, up until now, been diversified enough to go to the trouble of reporting by product line, but I think they will start once they get caught up with themselves. These kinds of stats provide info. that the company itself would like to be aware of.

    Even so, the report does wreak of grasping at straws, little tiny ones at that.

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