Apple’s all-time record quarterly earnings disappoint

Apple Inc.’s “fiscal first quarter marks the first full period to include sales of the iPhone 5, which launched in September. The company, which doesn’t break out sales by models, sold a record 47.8 million iPhone smartphones in the latest period, up 29% from a year earlier,” Nathalie Tadena reports for The Wall Street Journal. “Apple also sold a record 22.9 million iPad touchscreen tablet computers in the most recent quarter, a 49% year-over-year increase.”

“For the quarter ended Dec. 29, Apple reported a profit of $13.08 billion, up 0.1% from $13.06 billion a year earlier [and the most profitable quarter for any tech company in history, narrowly edging out Apple’s own $13.06 billion record set in the same quarter last year]. On a per-share basis, earnings fell to $13.81 a share from $13.87 a share as the latest period had slightly more shares outstanding. Revenue jumped 18% to $54.5 billion,” Tadena reports. “In October, the company predicted earnings of about $11.75 a share on revenue of about $52 billion. Analysts most recently projected $13.47 share and $54.73 billion, respectively.”

Tadena reports, “Shares fell 10.4% to $460.66 after hours. The stock, which reached an 11-month low last week following reports that Apple cut production for the iPhone for the current quarter, has fallen 16% over the past three months.”

Read more in the full article here.

Related articles:
Jim Cramer: ‘Without Steve Jobs, Apple is just another stock, it’s not magical anymore’ – January 23, 2013
After posting new all-time record revenue, Apple shares collapse in after-hours trading – January 23, 2013
MacDailyNews presents live notes from Apple’s Q113 Conference Call – January 23, 2013
Apple reports record results: $54.5 billion revenue, $13.1 billion profit, $13.81 EPS – January 23, 2013


    1. Solid? Apple’s fundamentals are the best in the industry.

      I can only laugh at those AnalCysts who expect better than RECORD figures. When the response to great news is frowns and boos, I know something insane is going on. I suspect this is the result of what I call Desperation Behavior, when anything freaky can happen and herding behavior is at its worst. What people are DESPERATE about remains to be determined by historians. At the very least, this is fascinating. ‘Interesting Times’ is the usual phrase. ‘Stupid Times’ is another.

      1. What’s going on is that the rest of the industry is tanking, so Apple must be tanking too. We eagerly await any rumored flaw in Apple’s story in order to validate our notion that it’s the whole industry that’s collapsing. Apple has no right to be better than Microsoft and Dell. That’s how the street is thinking. Thus black is white, night is day, and good news is bad.

        1. You meant Apple “must” be tanking too. /s The creatures we are talking about were brought up as conventional industry analysts. They didn’t have a course in industry disruption. Even if they had, they got a grade of F. They demonstrate no understanding of nonlinear effects, and their blatant motivation is short-term personal gain at the expense of anyone else. Conquerors bury their like in the silt while exploding into glory. It may take a few more iterations, but eventually these maggots will join their ilk in the compost pile of idiocy.

  1. Stock is still dropping and I am in complete shock as probably many others are also. Like many, I figured that the number of product sales would be much higher given the wonderful array of new products. In light of that, here are some questions that come from listening to the earnings report this afternoon:

    Tim Cook kept saying that a main objective was to produce the best possible consumer experience. But if you can’t meet demand, What is the point?

    Faster rollout of iPhone but product is constrained. Why have a faster rollout? All you do is disappoint more people?

    Introduced iMac before it could be ramped up. Why not introduce the iMac when you are able to sell them?

    It is reasonable to cut margins if you can gain better net profits. But if you can’t supply enough product to take advantage of this, why do so?

    Finally, what is the point of a wonderful array of new products if you can’t meet the demand? What is the point?

    1. Valid questions. Had they been able to meet iMac demand they would have had better numbers on the earnings call. Something that Cook related to on the call. It wouldn’t have been a large number of sales if you compare them to iPhone or iPad numbers but that probably would’ve been enough to have avoided the slaughter. Normally having more demand than you can meet is a great problem. But not if it continues for a long period of time. Or with new product rollouts consistently. That’s not good. Tim Cook is the supply chain guru so I hope he can fix it going forward.

      1. It is pathetic to announce a product that you know you can not deliver and that is exactly what they did. iMac still showing 2-3 and 3-4 weeks shipping on 21.5 and 27 inch models, respectively. It will be time for a hardware refresh before you can even get a 27 inch without waiting a month. Big fan here, but I expect more than this from Apple. And all this so the edge is a bit thinner? Not well played Tim.

        1. I ordered my 27 inch iMac November 30th. It was delivered December 17th. But I ordered at midnight the first second that I could possibly do it. Anyone who ordered later that day wasn’t so lucky. It was a Christmas gift so I’m happy that it came in time. Although I’m happy with my-year-old 27 inch iMac, it’s not as thin but who cares? And it has an optical drive. Which does come in handy. Had to order a separate optical drive for the new 27 inch iMac. But I’m waiting on the Mac Pro refresh. I’ll take four right now. Probably the end of 2013 for that. There’s a reason for somebody to really be pissed off. And I am. Apple doesn’t give a shit about professionals anymore. We’re very minute portion of their business. I understand but it doesn’t make me happy. Hopefully someone else will come along and address this niche market. Been a Mac user for decades but I won’t hesitate if someone shows me some love. ProTools works best on a Mac but that can change. Then there’s Final Cut Pro! Don’t dump your Avid. As for their inability to have enough product ready well, that really is a problem. It certainly bit them in the ass on this earnings call. Mac sales would have put them above the bar. That’s Tim Cook’s area of expertise supposedly. Apple needs to get product refresh and supply synchronized. The stock was down $55 today. Thursday could really be ugly. And it may not end there. Do not jump back into Apple now. If you didn’t take your profit hundreds ($250) of dollars ago don’t try to make it back now. Put it somewhere else. Remember, you don’t have to make the first 10% or the last 10% of a stock’s run. If you have to get back into Apple wait until it has its mojo back. But it won’t be the rocketship that it was in the past. That isn’t going to happen again. But it can be a value investment somewhere down the road.

      2. That’s a really good point. And further, as far as analysts go, none of them seem to quantify that aspect of apple. It’s punishing inefficiency on apple’s part, which is ironic because it’s a product of being extremely successful yet extremely conservative. From a business sense aspect it is far more a matter of discipline on apple’s part. And that is perhaps Tim Cook’s greatest contribution. And might i add a long con beneficial one. You want someone to run your already obscene war chest into a 50 trillion monster never before seen within a lifetime- Tim’s your guy.
        A stock’s price is about a solid as a $1 bill. It’s governed by so many social aspects of society it’s permeated by emotion. That in of itself is the arb of trading AAPL. And that is why it’s open to all manner of manipulation which causes amazing profit opportunities. Inefficiency is money. AAPL is low hanging fruit in that respect to the financial markets. You don’t have to go to options, international markets, currencies, etc. Just utilize the extremely cost efficient (free and anonymous) internet and it’s instantaneous proliferation of information. Sprinkle in some willing click whore career failures riding the gravy train of their long past dot com boom opportunities, and you have a perfect infrastructure to game the system.

    2. First of all, you can’t know that there will be supply constraints when you plan a product launch up to a year in advance or possibly longer.

      Anyway, if you’re Apple, you don’t want to skimp on quality control. Get them a product that they will love. Then they will be 75% likely (at least for the iPhone) to get a future iteration of that product. Also, despite the supply constraints, you can get more people into the Apple ecosystem sooner.

    3. Making 25M units isn’t easy especially with Apple’s design specs.
      There are not that many CE manufacturers doing that even for simpler products.
      Apple’s problem is that they are too successful. The demand is through the roof and they can’t meet the initial surge. They can only ramp up a certain amount because they don’t want to have too much inventory later on.
      The reality is that only Apple shareholders are hurting. Apple as a company are kicking butt and they probably don’t care whether the stock goes down (except for options).

      1. Exactly. There’s a physical and logistical limit to how much demand you can fulfill. Clearly, it is impossible for anyone to meet the demand that Apple must be attracting. And these are not dumb products like pots and pans, but fine-tuned, intricate and complex products.

        Apple is not God. Analysts and profit prophets must understand that.

    4. grswisher says:
      “Finally, what is the point of a wonderful array of new products if you can’t meet the demand? What is the point?”

      Was this sarcastic? Because otherwise it makes no sense. What should Apple do? Create a crappy array of products in order to reduce the demand, so that they can meet it?

      This is a problem any company would love to have.

      1. Except for a company that just lost over 10% of its market cap this evening. For instance, there was no reason to introduce a new iMac if you can’t meet demand especially during the Christmas quarter. There is an old saying “You can’t sell out of an empty waggon”.

      2. “Can’t meet demand” You are asking them to have the exact same problem they had in the 80’s and 90’s. They had more stock sitting waiting for buyers that it was costing them money they didn’t have. Steve brought in Tim to fine tune all of that excess waste. They can’t predict the demand and they won’t make more than they think they will sell. It is a fine line and I am happy they walk it. If you want a race to the bottom, just look at how every one else is doing in the post PC era.

  2. The Lance Armstrong of stocks. You loved it, heard rumors that it was rotting, looked the other way, attacked the naysayers … and then, zowie, they were all right all along. Fk me.

      1. Maybe you failed to read the next quarter projections or fail to see that although worldwide PC shipments fell 6.4%, MAC shipments fell 20%. Parse it any way you want to. Others are making great phones at much lower prices and new buyers are catching on. You can only overcharge and hype your product until something of equal quality or better quality comes along at a lower price, and eventually you will lose market share. Observe what happened to Zenith…Cadillac of TV’s for a couple of decades. A lot of folks aren’t cult members or don’t want to be. I have an iphone, but actually use my Galaxy Note II as I find it a better phone. Hate me for it or just understand that there are different strokes for different folks. Good luck in your investing.

        1. I am afraid there might be some truth to this.

          We have been seeing a slowdown in Mac sales now for a year. At the local Community Colleges, sales of Macs have been quietly declining.

          This is not what my fellow Mac users want to see. Especially with Microsoft messing up Windows 8. Mac sales should be booming!

          What is the cause of the sales slowdown? Students are saying the following:

          Lack of value, for the price.

          Mac sales pitch in past was, slightly higher price much greater value. Mac’s included:

          – Word Processing
          – Spreadsheets
          – Presentations
          – Reasonably good E-mail program
          – Web publisher
          – Photo Editor
          – Video Editor
          – Audio Editor

          Students now tell us:

          Pages lacks academic formatting so they have to buy Office.

          Numbers lacks several essential academic features.

          iPhoto – is less powerful than iPad edition or free Picasa.

          iWeb missing updates then discontinued.

          iMovie, can’t import highest quality videos from digital cameras that have been on the market for almost three years. (1080 60p)

          iMovie cannot burn a HD dvd or a bluray disk. (Not dead by any means) Students and clients state over and over again, I am not paying more to receive less.

          Small business would love to have a powerful, easy to use flat file database that could be used with pages for creating mail merge lists and documents.

          I hear this routinely on my consulting appointments. It is amazing how many small businesses are still using MS Works 4.6 from 1997. Why? They can’t find a good replacement. Apple should include a powerful, easy to use flat file database with iWork. Including a flat file database with iWork would move a lot of Macs into small business.

          Come on Apple fix these issues and make a major move against Microsoft.

          1. You want a flat file database for your Mac, look no further than FileMaker.

            Your other academic complaints don’t resinate at my university. Quite the contrary, students are leading the charge of dumping their Mac for iPads and want those of us in education and administration to find better and faster ways to facilitate their needs through apps.

            Also, I’ve read three dissertations done by my students this year all done in Pages, which myself and my students would lay claim to being far better at formatting complex charts and graphs along with text reportage than MS Word or any other word processor. So, I’m not sure what you’re talking about when you say Pages lacks “academic formatting” since it supports EndNotes as well.

            As for the list of your other complaints, our students are finding cloud based solutions like DropBox, Google Drive/Google Docs, iCloud, Evernote, etc. as being very capable at handling the needs toward publishing both capstone projects and academic portfolios with little fanfare or complaint about Apple’s offerings as many web based and app based solutions exist for them to regardless of platform.

        2. @keembo

          I didn’t fail to read the next quarter projections, I’m just calling out “[AAPL is] rotting” as hyperbole. As is your description of most users of Apple products as “cult members”. If you prefer your Galaxy Note, that’s great. Just don’t think that competition from Android-based phones and tablets is causing some sort of massive sales decline for Apple.

          1. CraigNotGreg
            “As is your description of most users of Apple products as “cult members”.

            First of all I didn’t say most users of Apple products as “cult members,” but doesn’t this website talk about the “CULT OF MAC?” What else is it?
            I might also disagree with you also when you say “Just don’t think that competition from Android-based phones and tablets is causing some sort of massive sales decline for Apple.” Those most certainly are causing large percentage declines for Apple. Remember…Apple nearly had the smartphone market sewed up, and now Android is nearly 3 out of 4 phones. They sure weren’t 4 years ago, and every one owning one of those phones was a potential iphone owner that is lost. Are you trying to say that every Samsung Galaxy S3 sold didn’t hurt Apple? I bet Timmy Cook would love to have those S3 owners playing on an iphone 5, but they aren’t and won’t be in the future. There are still plenty of iphones sold, because “cultists” will always trade up for only the iphone, and there are quite a few folks that haven’t bought smartphones yet that actually don’t even know the name smartphone but only iphone, because that is all they heard for years, and they will go into a store and ask for an iphone. That being said…worldwide, Android has made huge huge gains. I also expect Huawei to become one of the largest smartphone makers hurting Apple even further, as they will sell them to the billions in China at a price those people can afford. Apple won’t. BTW…I enjoyed my iphone for the time I used it, but I don’t find that it is simpler to use than my Android phone at this point, and the iphone 5 can’t begin to do what my Note II does, but perhaps Apple will “slavishly” copy Samsung’s large screen format and offer something of similar size and quality. Ya think?

            1. I hope you don’t object to my pointing out that people who write MAC (all caps) are not taken seriously by Mac aficionados. It comes across as uninformed blustering. Note that I do not attempt to refute the points you are trying to make, only to suggest an improvement to your rhetorical style. A keener appreciation of the paragraph could also assist the cause of persuasion, if that is your interest, although I doubt it—I detect anger and self-righteousness in its place.

            2. “I hope you don’t object to my pointing out that people who write MAC (all caps) are not taken seriously by Mac aficionados. It comes across as uninformed blustering.”

              Of course I don’t object, as I don’t measure success within my life by whether Mac aficionados have an opinion on whether I use all caps on MAC or all small letters or a combination of the two. I doubt they care about my opinion either, so we will leave itat that. If you detect anger, then you must have a new anger detecting device on your IOs. Have a great day. kkkk

            3. @keembo

              “Remember…Apple nearly had the smartphone market sewed up, and now Android is nearly 3 out of 4 phones.”

              What is the point of comparing Apple’s market share to the combined market share of Samsung, HTC, Motorola, and all other OEM’s that run Android? The smartphone market is huge, so of course those other vendors were able to sell many phones once they entered it.

              “Are you trying to say that every Samsung Galaxy S3 sold didn’t hurt Apple?”

              Technically, every Samsung smartphone sold is a phone Apple could have sold. It’s also a phone Motorola, HTC, Huawei, (etc) could have sold, which again begs the question I asked you earlier. The problem with the “Android is killing Apple” theory is that iPhone and iPad unit sales increased substantially year after year (including the period in which Android experienced most of its growth), and Apple’s main issues have been SUPPLY driven.

  3. Did the ANAL-cists not remember that there was ONE FULL WEEK of sales last years quarter that DID NOT EXIST THIS QUARTER???

    I guess that means you could ADD ABOUT 1/12th of the numbers to this years first quarter to see how good they REALLY DID compared to last year!

  4. Honestly… They could have sold double the amount they did and analysts would have still called it “disappointing”.. Its absolutely ridiculous.

    A company sells so damn many products there isnt manufacturing capable of making it fast enough in a GOD DAMN RECESSION.. Yet people still wanna bitch. Just boggles my mind..

    Proof positive the stock market is completely and utterly manipulated.

    1. I totally agree with you!! Plus good old American Greed. I wonder how many other companies are doing as well in this recession. I’m a stock holder of Apple and am quite pleased with the results. I can’t understand why the market doesn’t recognize a quality company who looks after their customers rather than their stockholders. I do believe the market is being manipulated!!

  5. People buy comanies because they think they will (1) grow substantially (2) keep solid earnings year after year. People who use reason 1 are running for the exits becuase Apple looks like a company that is peaking. People who use reason number 2 aren’t in Apple yet and are not sure they should be. When people realize that we will all have iPhones and macBooks 20 years from now, income investors (reason #2) will buy and hold Apple. Unless Cupertino comes up with something new, huge, and original… Not TV, not cheap iphone, something totally unthought of until it’s announced, growth investors (#1) ade headed for the exits.

      1. The markets don’t make sense. It’s psychology in many ways. I agree completely. I wouldn’t invest in Netflix. I wouldn’t pay a dime to own Priceline, but I know many people who have made a lot of money on both. Apple’s problem is that it’s the biggest company in the world, it’s hard for people to imagine it doubling or quadrupling from here, so the growth guys go away. At the same time, the by-and-hold crowd that live on dividends aren’t sure Apple is safe yet. It’s going to be rocky, I fear. But if logic ruled Wall Street, Apple would be $1500 a share and Amazon would be $1. Don’t know what else to say.

  6. If you add in the deferred revenue, the gross margins approach 42 percent. Apple should do a non- GAAP comparison. 2938 billion in deferred revenue amounts to an additional $2.5 in eps at tax rate of 76 percent.


    The Market for technology products is fickle, flighty, transparent, changes on a nano-turn, has mood swings that NO ONE can predict or explain, yet Tim Cook, as smart as he is, keeps trying to chop it up into manageable little, behaviorally consistent nuggets he can spin up a can of blinking lights, buttons and tightly wound antenna to keep them ‘stable’…… “BULLSHIT”!!!

    The last 6 or 7 weeks of press, speculation, lies, manna, arguments, rights and wrongs, strong and weak statements, and a lot of what ever it takes to settle the noise down, has managed to crash the value of Apple down by 40 %….. THAT’ s OVER $ 200 BILLION DOLLARS because people like to scream at each other and calm heads can’t scream as loud as morons. AND, because the morons that have been screaming for the last 6 or 7 weeks like lunatics straight out of the asylum, got EXACTLY WHAT THEY THOUGHT TODAY… A CRAPPY APPLE EARNINGS REPORT – FROM A HOLIDAY PERIOD !! W T F !!!

    I don’t care if it was the law of big numbers (they got reduced by $ 200 BILLION over the last few weeks), I don’t care if it’s Klowns making up bad FUD halfway around the world that was a LIE the instant it hit a keyboard. It resulted in a BAD EARNINGS REPORT FROM APPLE TODAY and that’s NOT ACCEPTABLE. ESPECIALLY IN A STONG HOLIDAY QUARTER where they should have had a performance that just left global pundits stunned and speechless …. Instead, Apple got laughed off the stage and the stock went down ANOTHER $ 60 BILLION DOLLARS !!!



      Apparently you live on a different planet from me. What ‘bad earnings report’ happened on your world?

      So future historical psychologists! What is your term for this form of incoherent imaginary facts versus reality facts? We primitives back in 2013 call it schizophrenia.

  8. it’s been very easy to see for some time now that calls were way oversold and massive contrary positions became necessary for the options writers. with two “misses” in a row, now the overstack can be flipped and reversed… everything I’ve looked at in October when AAPL was at 650 when I was considering buying options has pointed to AAPL not busting above 580-600 until march. It fried my mellon at the time, but the options prices from Nov 2012 – Feb 2013 indicated pretty solidly exactly what is happening now… I wish that I had sold some of my AAPL and picked it up under 500 and built my holding up 150% at no cost… hindsight is 20/20… not all is lost… will likely add to my holding at a good discount on tomorrow’s AAPL

  9. These analysts are all book smart. They probably have never spent a day in a position of responsibility for a major corporation. It is easy to say turn straw into gold…if YOU don’t have to do it.

    Henry Ford, a titan of a different era, had no use for the money changers and knew that the market was no indicator of corporate success.

    If these guys are so smart, why don’t they come up with the next big thing. Reminds me of the politicians in DC. Bad mouth the other party, but have no plan of their own.

    It is sickening!

    1. What have analysts done today? These weren’t analyst predictions, these were Apple’s numbers. Analysts aren’t selling off in after hours trading, Apple shareholders are.

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