“Apple released Q4 FY 2013 earnings last evening, beating EPS expectations by $0.32, surpassing revenue expectations and delivering at the high end of revenue guidance,” Darcy Travlos reports for Forbes. “The stock closed at $529 before earnings and traded up to over $540 with the impressive EPS headlines. Then, gross margin guidance for the next quarter came in below expectations. The stock reversed and declined to $503. As key points were made on the call, the stock retreated to the closing price.”
“Apple is deferring a greater percentage of revenue on each device sold,” Travlos reports. “Specifically, Apple will defer $5 more for each device sold and $20 more for each Mac sold, resulting in an additional $900 Million in deferred revenue next quarter over this quarter just reported. By increasing deferred revenue, revenue and gross margin will be lower ‘dollar for dollar’ from how they have been reported this current quarter and previous quarters. So, when the company provided revenue and gross margin guidance on this new basis, investors did not realize yet the basis was different. When management explained this on the call, the stock reversed its downward trend.”
Travlos reports, “Tim Cook, Apple CEO, signaled new products on the horizon when asked why the iPhone needed a 64-bit processor or the advanced M7 motion sensor. He stated that Apple is ‘at the front end of a long road map.’ He reiterated a commitment to ‘exciting new products in the fall and across 2014’ which leaves Apple followers to assume he is forecasting a watch, or some other mobile product that can take advantage of motion sensor and high-level processing. It may also provide insight as to Apple’s recent and extraordinary strategy shift to give away its software. Tim Cook wants all customers to have the same experience at any product price point… Tim Cook is more effusive regarding new products, margins remain healthy, and Apple is growing in the stagnant PC and China markets. Taken together, Apple investors may want to consider this a revival for Apple.”
Much more in the full article – recommended – here.
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