Apple 4th Quarter 2015 Financials
blow past Street expectations
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Posted on 10/27/2015 2:25:10 PM PDT by Swordmaker
record 4Q results and the stock barely budged.
odd.
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It can't budge too much. The overall market is closed until tomorrow. The after-hours stock went up by $4 and then someone took some profits. . . and it went down by almost as much. It's being churned by small sellers up and down. . .
Stocks don’t move on what you did last quarter unless your results were unexpectedly terrible.
AAPL will only move up if next quarter’s guidance is good. What did the conference call indicate about next quarter?
“Luca Maestri, chief financial officer at the company...”
That would be a fun job. I stick with OS Mountain Lion and I am glad other people appreciate Apple’s contemporary works.
This is the guidance, but it has to be compared to 1st quarter of 2015. After hours, AAPL hasn’t budged either way which tells me that the stock is not going to pop up.
Apple is providing the following guidance for its fiscal 2016 first quarter:
• revenue between $75.5 billion and $77.5 billion
• gross margin between 39 percent and 40 percent
• operating expenses between $6.3 billion and $6.4 billion
• other income/(expense) of $400 million
• tax rate of 26.2 percent
And the street said, “Oh look!” That lasted about an hour.
Now 2 hours later it’s more like “Meh...”
Now, after-hours trading is down 33¢ after closing. The reason is that Apple didn't give huge enough guidance for next quarter, putting the numbers in the middle of the over-heated expectations of the ANAL-cysts who know only how to look at last year's similar quarter and don't look at monetary consideration of the current strong dollar which puts strong headwinds in the way of making huge growth possible and also ignores Apple penchant to make conservative guidance. Apple guided $75-$77 Billion for the last calendar quarter of 2015 (1st fiscal quarter of 2016) when the ANAL-cysts wanted Apple to make a solid $77 billion guidance.
Also Business Insider came out with a huge headline claiming that Apple MISSED on the iPhone expectation last quarter because they did not exceed the wildest of the ANAL-cysts predictions, such as one who claimed they'd sell 51 million when last year's same quarter they only sold 39 million. Where'd he get that figure? His posterior????
This is the reason:
Its forecast for the all-important December quarter was in line with expectations: Apple predicts it will generate $75.5-77.5 billion this quarter. This would represent modest, slowing growth, relative to prior quarters. Last year, Apple reported $74.6 billion in December quarter revenue. So its midpoint guidance this time, $76.5 billion, would imply just 2.5% growth. That’s a big deceleration from the past four quarters, where growth has been in the 20s and 30s, percentage-wise.
That is how a growth stock valuation works, whether you like it or not. You can’t even call it a manipulated market, because the analysts information is out there well ahead of time. It’s no different scenario for other growth stocks. You have to get used to it and learn how to trade or invest according to those rules.
And Apple's 1st fiscal quarter of 2015 was the best quarter ever for any company in history. . . and the stock dropped because it didn't meet the over-heated expectations of some ANAL-cysts on Wall Street. This is AAPL's fate in the market.
The ANAL-cysts expect Apple to do the same thing only bigger and better, and Apple's guidance, even at the lowest says they expect to do that, even with a stronger dollar, but apparently the ignorant ANAL-cysts don't recognize what Apple is telling them. Apple is telling them they expect to exceed that quarter by at least $1 billion in revenue and likely by $3 Billion. They fail to recognize that Apple is known for providing conservative guidance and usually exceeding their high guidance by a billion or two. They will then, in the next quarter, wildly over-estimate what Apple will do, based on Apple's guidance and the wild-hares they get where the sun doesn't shine. . . and again be disappointed in the results, no matter how big a blow-out quarter Apple reports.
I don't worry about it. . . but AAPL is manipulated. I documented it last quarter when Yahoo! Finance actually changed their reporting of the Street Expectation Whisper numbers between 8:30 AM and 2:00PM and had adjusted the numbers they had reported that morning DOWNWARD so they could claim that Apple had MISSED the revenue expectation when in actuality they had beaten it by over a billion dollars! This article appeared at exactly 2PM Pacific Time and had to have appeared based on a sequestered press release from Apple. . . because that was the exact tick of the clock of the release. Within ten minutes, every Financial report picked up Yahoo! finance's claim that Apple had "missed" the Street's "whisper" number for revenue, ignoring that Whisper numbers don't change after the market opens and they were all in agreement that it was an entirely different number, including Yahoo! at 8:30AM Pacific Time that morning! It was, after all, based on already published ANAL-cysts projections. . . and non a single one of them had changed. However, with the Yahoo! FALSE reporting the STOCK DROPPED LIKE A ROCK! It took two days to recover, and in the mean time someone made a huge killing.
Aapl skyrocketed in its 1st quarter. What are you talking about? I made 65k on aapl that quarter.
You’re just blowing smoke. Don’t play in the market if you don’t understand it.
You make the mistake of being enamored with a stock or company instead of following trading discipline
.
Alma, Apple's management is required to give some guidance. It does not have to be accurate guidance, only reasonable. What Apple's management provided was "reasonable" and conservative. They are prognosticating what they expect they most likely can do based on history. A safe, reasonable prediction based on past performance. They cannot get in trouble for doing that kind of guidance. I've been a CEO. It's what I would do in their shoes. If they don't make it, they can't be sued for giving that guidance because it's "reasonable" being based on history and there are no indicators against being able to do it again. If they blow it away with a huge revenue and gigantic profits, great. . . they don't have to guide for that. No one can guarantee that. . . or even "reasonably" expect it. If they guide for it and don't make it, they COULD conceivably sued by stockholders who relied on that guidance.
Frankly, I have always thought that "guidance" is a mis-guided Liberal concept. "Please predict the future, with all of its unknowables. Keep in mind that we are going to hold the value of your company hostage to how accurate you are. And, if you are wrong, we will sue you personally!" Naturally, you are going to get very conservative guidance. Under Steve Jobs, the guidance was often ridiculously low. . . because, I think, he felt about it the way I do. Why bother to even try to be close to reality? It was pretty obvious that Jobs did not care much for the wonks on Wall Street. Tim Cook gives it a lot more attention that Jobs ever did.
You are spot on.
AAPL is not priced like a typical growth stock with a P/E of 13. And rightfully soo. Virtually everything they make is or will be a commodity. Even with the low P/E, they must continue to innovate.
They have a PEG Ratio (5 yr) of 0.73? This is screaming at me that this is not really priced as a growth stock, there’s something wrong. Just like a 13 P/E tells me there’s something wrong.
People should never get married to a companies stock because they make great products, they are two very different things.
I just noticed your above post.
With this in mind, I wouldn't be surprised to see this stock down quite a bit tomorrow.
Lower than what analyst need to see. Stock is down for the day and flat after hours.
Try reading what I said, not what you apparently think I said, Alma. I don't blow smoke.
Yes, it did skyrocket in the 1st CALENDAR quarter, Alma. . . but Apple has been making record breaking quarters as a company all this year (look it up) and I was talking about the irrational reaction of the stock market to the record quarter Apple reported at the LAST financial conference call when Yahoo! Finance manipulated the news to make it look as if Apple had missed expectations on its revenue when the only thing it had SLIGHTLY missed on was the Street's over-heated expectations on iPhone sales when anyone who follows the iPhone market knows that iPhones sales get slightly depressed in anticipation of the fall release of the newer model.
I posted the relevant 8:30AM and 2:00PM articles written by the SAME AUTHOR from Yahoo! Finance highlighting the CHANGE in the Revenue expectation on FR back in July when Apple made their last Fiscal Conference Call and covered the subject quite thoroughly. A day later the "revenue miss" meme was dropped completely by the financial press—I think as they realized they'd been played—and AAPL had recovered after a swoon in stock value of 7% on a record quarter!
Apple stock also initially dropped over $4 a share when Apple reported the best quarter in world history too. . . ANAL-cysts claimed that AAPL already had that quarter already baked into its stock price. It was only after people realized the ANAL-cysts were the ones blowing smoke that it took off. I too made money during the second RECORD fiscal quarter, but the truly blow-out nature of what they reported WAS NOT expected.
I bought AAPL and hold it. I am not a trader. The traders want AAPL to churn.
You mistake what I am. . . I am an ex-CEO and educated as an Economist with a minor in Finance. I do know what I am talking about and have been watching what happens with AAPL for years. There are games being played.
Apple is NOT a growth stock as you claimed. How many growth stocks do you know pay dividends at the rate that AAPL does? How many are buying back stock at the rate Apple is? How many growth stocks have $206 Billion in cash on hand? AAPL is way undervalued.
Most people in investing really do not understand Apple at all.
Apple has been confounding traders for years and they do not understand it. It is a stock that is unlike anything they've ever encountered before, and they literally don't know how to handle it or what to do with it. There is no other company in history that has returned more value to its investors than Apple. Total the dividends, the buy backs, and the cash on hand. The best plan is to buy AAPL and hold on.
Yet, Amazon which barely squeaked by to report a minuscule profit of $76 million (compared to Apple's $11.1 Billion) on revenues of $25.4 Billion (compared to Apple's $51.5 Billion) and 17¢ per $612 share (compared to Apple's $1.96 per $114 share), is thought wonderful and its stock skyrockets on promises of someday, someday, someday. . . Yet the Street is ecstatic over its position as a tech company with 25% margins (compared to Apple's 40% margins to which the Street says "Meh") based on Amazon's $542 million profit on its cloud services and selling Kindle fire tablets (please ignore that $170 million write off Amazon took on the failed Fire phones), so the Wall Street wonks are dancing and falling all over themselves, singing the praises of a barely profitable company that shows little sign of ever making a legitimate capitalist return, recommending everyone invent in its flawed business plan which damages every market it enters, and the stock value soars way beyond any rational P/E ratio at ~886 (compared to Apples at a sane level of ~13)
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