“Apple Inc.’s fiscal second quarter was another blowout, with results that easily surpassed Wall Street’s expectations, but it wasn’t enough for investors to warm up to the company’s stock any further,” Jordan Robertson reports for The Associated Press.
“While Apple’s sales jumped 43 percent and profits rose 36 percent, higher than analyst estimates, lower-than-expected guidance for the third quarter held the stock down,” Robertson reports.
MacDailyNews Take: Yes, it’s shocking that Apple provided conservative guidance. Just shocking.
“Investors decided that they still need to take a cautious approach toward a company known for its conservative guidance but also heavily weighted toward the U.S. market, which is rife with turbulence stemming from the crisis in the credit and housing markets,” Robertson reports.
“Investors were worried that Apple’s gross profit margin — a key measure of how well a company controls manufacturing costs and pricing — came in below what many on Wall Street were expecting, despite Apple beating the net income estimate,” Robertson reports. “Apple’s gross profit margin was 32.9 percent of revenues, better than the company’s guidance but below the 35.1 percent in the year-ago period.”
“Investors were also concerned because Apple’s third-quarter profit guidance of $1 per share is below the $1.10 per share that analysts surveyed by Thomson Financial were expecting. The expected sales of $7.2 billion, however, would be slightly higher than Wall Street’s average forecast of $7.16 billion,” Robertson reports.
“Apple has traditionally issued conservative financial forecasts, and its U.S. sales were particularly strong in the latest quarter, rising 40 percent over last year,” Robertson reports. “So many investors were left scratching their heads about how to interpret Apple’s outlook.”
MacDailyNews Take: Uh, how about interpreting it as conservative? Sheesh.
Robertson reports, “The company earned $1.05 billion, or $1.16 per share, in its second quarter, which ended March 29. That’s 9 cents per share better than the average analyst estimate. During the same period last year, Apple earned $770 million, or 87 cents per share. Revenue jumped to $7.51 billion, better than the $6.96 billion analysts were expecting. Apple said it was the strongest second-quarter sales and earnings performance in the company’s history.”
Full article here.
The Suck Market is worse the Las Vegas.
It is pretty obvious the fix is in against Apple on Wall Street. All Apple does is make more money and all Wall Street can do is tell everyone how horrible that is.
Remember people: Cramer and the rest of these A$$ clowns were the idiots that were too stupid to make money on the .com boom. Since they are the leftovers, people consider them experts…this is just the Wall Street equivalent of the movie “Being There”.
SB – than.
I’m amazed that these guys are quibbling over 0.2% drop in profit margin. Considering that Apple 4 or 5 years ago would have a profit margin around 27% what is the big deal?
What margin does Dell or HP have on their hardware business? Probably 10-15% if that.
Apple made over $1B in profit. I think this is only the third time in their history and the first time for this quarter for sure, which is the slowest quarter for the year.
I think we can easily have Apple selling 10M macs this year, with probably 50B revenue and up to 7B profit.
Apple are on fire and I’m not talking about their laptop batteries!
Please review the numbers.
The March quarter is the weakest of the four. The December quarter is the strongest.
This March quarter was bigger than the year ago December quarter.
Let’s revisit this idea.
The weakest quarter for this year was better than the strongest quarter a year ago.
Okay, one more time.
Today, the new small is bigger than biggest was a year ago.
Any questions?
Really amazing the glass half empty observance of a company that is kicking the tech industries butts in every way imaginable…maybe that’s it…resentment.
Look at CNNMoney’s articles on Apple’s guidance vs Dell’s pink slip of over 1000 peoples jobs. Don’t tell me there’s not anything under the table there. Media bias…half truths!
Simply Google a chart for Apple the last 5 years…that is what your long term investment choices should be made upon.
Someone on the conference call explained that the reason the profit margin wasn’t higher was because Apple made so much money on iTunes, which has a low profit margin. How can this raise a concern that they aren’t controlling manufacturing costs? These analysts aren’t that smart.
God, I would hate to be a CEO of a public company. Gross margins are very important, but the fact is that Apple exceeded THEIR projections for gross margins, but they get punished because they don’t meet expectations from 3rd party analysts outside the company. This type of system, with a bunch of outsiders debating the minutia of every number on the balance sheet each quarter would drive me crazy. It’s got to drive SJ crazy. Either that or he has learned how to totally ignore it.
@ron,
Not sure about that one from what I can remember of my last trip to Vegas.
P.S. A tip – Hot women who come up and hit on you in a bar are actually working. You may not know it at that point in time, but you will find out later – trust me!
($300 for what?!?!?!)
P.P.S. I’ve never paid for it in my life, but I have been paid for it.
About the gross profit margin, another factor is that the costs, but not the revenues, from iPhone sales are being deferred. This is because the promise was made to upgrade the software for free, and that won’t happen until June. And since the phones are out of stock in the big city, one assumes that they are selling flat out with no revenue recognition, thus reducing the margin %. This will have a positive impact on margin in the next quarter. Next, the worry was that the cash assets, currently around 19 bills, were being mis-invested, as in ABCP, but we received confirmation that the investment returns were running around 3% and no undue risk was being taken on worthless paper. This provides faith in the competence of Apple’s management, and is the big thing hairy was worried about. The good news is that Apple has avoided making RDDs. It’s in a class by itself.
The analysts are nuts. I was watching CNBC yesterday, and one analyst commented on the fact that Apple’s “Surprise Upside”, meaning the amount they made above their guidance, wasn’t at least 20%. It’s just ridiculous. I think Apple should refrain from giving any guidance at all.
Stock is wobbling? It’s up 4.79 right now, it’s at the highest price it’s been at since their last quarterly report. Maybe I’m crazy and don’t understand what “wobbling” means, I dunno. But if you look at the graph for today (don’t you just love the stock widget?), it’s been a fairly straight shot up.
Correction: I meant to say the costs are recorded, but not the revenues; the revenues are deferred.
Mea culpa. I’m surprised no-one picked me up on this yet. Also, in the conference call, not a single “analyst” asked if the company had invested its cash in ABCP. Management had to mention it; nobody asked. Why not? Because they are not accountants they don’t understand balance sheets, I guess.
Avoiding loss is as important., as in not making Really Dumb Decisions. Apple has conserved its cash. Wish they would start dividends instead of options for employees. Let the employees buy stock and invest in the company.
I call bullshit on the AP. If you actually listened to the whole presentation and guidance session, which Apple streamed, you would have heard the awe and respect in the anal-ist’s voices for Apple’s performance. I hope that we do not have long to wait for Apple to supply the Quicktime video.
Even the long time Apple doubting anal-ists were impressed. The insane SOX law forces Apple to understate its real earnings. Even the anal-ists know that — hell, reading financial spreadsheets is a necessary skill to be hired as an analyst.
Buyers are lining up to buy Apple on the slightest dip. The bears are likely to get run over by the rampaging bulls.
I’d just like to reiterate my previous point. AAPL is now up $6.20, or 3.81%. How is this a bad thing?
The GMs are nuts! IIRC, 35.1% is the highest Apple has ever recorded, and it was a one-off. They even said so in the conference call from last year. Last year, NAND flash was super-cheap, as was DRAM and LCD panels.
Apple is now using alot of LED panels in laptops, in the 15″ MBP, and as an option in the 17″ MBP, and in the 13″ MBA. The GMs due to the LED panels are lower, because they are more expensive than the LCDs they replaced, and yet Apple has kept the same price points. Duh!