I seem to have reported Apple’s quarterly earnings ‘forever’. If Apple has a ‘problem’ it is that expectations are so high that a performance that every other company would be ecstatic about can be greeted with disappointment.
Apple had revenues of $35b in Q3 – up 33% YOY. Profit was $8.8b – up 21% YOY. Cash increased by $7b to $117b. They sold 26m iPhones (up 28%), 17m iPads (up 84%), 4m Apple TVs (up 170%) and 4m Macs (up 2%) and 6.8m iPods (down 10%) Apple also announced a $2.65 dividend per share and a $10b stock repurchase scheme.
Yesterday I was on a BA flight watching the stewardess using an iPad inflight. Tim Cook mentioned this application when he announced that the number of iPads in use in Fortune 500 companies had tripled in the last year. Apple now claims a 25% share of the PC market in the US.
Of course, ‘The Street’ had been expecting even more. Apple is its own worst enemy here as it always ‘calls low’ and then exceeds expectations. This time it really looks as if the Eurozone was the culprit with sales down 6%. ‘Growth in Greece, France and Italy were particularly poor’. Amazingly, sales in the UK were up 30%. "Economic impact in Australia, Brazil and Canada" was also mentioned - but there was 'no slowdown in the US or China". Also, consumers are waiting for the iPhone5 due out this autumn which lead to 9m fewer iPhones being sold in Q3 than in Q2. Every rumour suggests that the iPhone 5 will be a very significant product enhancement - so consumers waiting for the new wonder phone is not that surprising.
Apple is now guiding to a 20% revenue increase YOY. Also many hints of a great new product line-up in the next six months which will include a new iPhone, possibly a smaller iPad and the long awaited ‘proper’ Apple TV.
After the announcement, Apple shares fell 5%. But that still means they are up c40% YTD. On almost any reckoning Apple is ‘cheap’. They are now even a dividend payer for the portfolios of those ‘widows and orphans’.
I’ve long declared I am a very long term Apple shareholder; buying in 2004 at about $10. Nothing I have heard tonight makes me want to sell.