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Apple's profit margin down, shares take a hit
We already know that iOS devices had a record-breaking quarter according to Apple's most recent earnings report, but that figure alone isn't enough to impress Wall Street. Unfortunately, while the company dodged a year-over-year loss in overall profit, the company's profit margin took a sizable hit, down 6.1 percentage points to 38.6% from a year earlier. This, combined with worries that current iPhone sales have flattened off considerably, helped to contribute to an after-hours hit to Apple's stock price. Currently, shares are down just over 10% (roughly 51 points) since trading closed.
Relax, Apple doesn't need a 'happiness machine' to thrive
Over the last few months both the press and analysts have been so busy falling over themselves spouting the most dramatic nonsense about Apple's impending demise that the non-techie could be forgiven for actually thinking that the company was about to go under. If you read any Apple news or news about the financial markets in general, you know what I'm talking about. You've read phrases like these in the comments of articles (or worse, the articles themselves) in the last two months: "AAPL drops 30 percent to $500! Next stop $200!" "Apple slashes screen orders. Is anyone buying the iPhone?" "The company doesn't know how to innovate anymore!" And the worst of all (because this was an actual headline): "If Steve Jobs Were Alive, He Would Fire Tim Cook." The last example is so monumentally stupid -- and not just due to the fact that someone thinks they actually know what a dead guy would do, but also because it portends that Tim Cook is driving the company into the ground. But in spite of all the stupidity out there, there is a shining ray of sanity, logic and reason. That comes to us from Dan Pallotta, of Pallotta TeamWorks. The quote below is him explaining to CNBC why he is long on AAPL and, you know, why things are going to be okay for the largest technology company the world has ever seen. I'll let Pallotta's words speak for themselves without comment [but first, a big thanks to MacDaily News who first spotlighted Pallotta's comment]. Dan Polatta, Friday, January 18, 2013: Short term expectations for Apple are so high that people are hallucinating. They're missing the big picture. They literally expect Apple to come out with, like a "happiness machine" or a time travel machine... Apple doesn't have to disrupt at that level to thrive and Apple doesn't have to innovate every 20 minutes in order to be one of the best investments on the planet. People are piling on Tim Cook, saying "Oh, he hasn't introduced a new disruptive product, he hasn't innovated." He hasn't innovated? This is a guy who, in a year, has taken the company through this horrible process of bereavement and refreshed every single product in the lineup. And people forget that Steve Jobs didn't innovate every year. He didn't come up with some disruptive product every year. You know, it was four years from the time he retook the reins at Apple until the time that he came up with the iPod. And, when he came up with the iPod, everybody said, "Oh, it's too expensive." It was six years between the iPod and the iPhone and when he came up with the iPhone, everybody said, "Well, that's not a disruption. It has no physical keyboard, it's gonna flop, and it's too expensive." Then another four years, until he comes up with the iPad and then when everybody sees that, they say "Oh, that's not a disruption, that's just a bigger iPhone." So, what people don't understand is that Apple takes the time to get things right and that is the disruption. That is the innovation. [Image by Ged Carroll]
Analyst expects Apple stock to drop to $270
Apple's stock price has had quite an interesting year. After hitting a record high of over $700 per share in September, the price has been hovering around the $500 mark for several weeks. But as Businessweek reports, that figure just isn't low enough for analyst Edward Zabitsky, who is banking on shares to dive as low as $270. Zabitsky cites several factors in his argument that Apple's stock is headed for a fall, including competition from the likes of Microsoft and Samsung, and what he sees as unrest in Apple's management. He predicts that the stock will reach the $270 mark within 12 months. Apple's stock price hasn't dipped as low as $270 since September 2010, so a dip that low within a year's time would certainly be a dramatic stumble.
Apple named top stock for 2013 by Barron's
Despite falling off significantly from its highest point of the year at over $700 a share, Apple's stock is still a hot topic amongst investment gurus. Financial magazine Barron's not only retains faith in Cupertino's value, but feels so strongly about the company's ability to once again reach a lofty value that is has placed Apple at the top of its Favorite Stocks for 2013 list. Helping boost Apple's standing in Barron's eyes is its current price-to-earnings ratio, which the publication notes is at its lowest point in half a decade. "None of the recent investor concerns -- lower margins, supply constraints, management changes, iPad competition and the iPhone 5 map fiasco -- are major," Barron's explains. "There's room for a higher dividend and a more aggressive share-repurchase program in 2013. Both could play well with investors." [Via: BGR]
Daily Update for December 5, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Apple investors 'return to senses' with big rally today
A massive sell-off in Apple shares that's been going on for about eight weeks now appears to have been nipped in the bud with a rally from Friday's close of US$527.68 to a high around $560. While the news out of Washington, DC about possible action on the upcoming "fiscal cliff" appears to be driving a broader market rally today, John Paczkowski at AllThingsD points out the real driver behind the AAPL rally -- Wall Street analysts are pointing out the stock slide as "unmerited". This morning, Topeka Capital Markets' Brian White sent a note to clients stating that "The sell-off in Apple's stock over the past eight weeks has gotten to the point of being 'insanely insane' given the depressed valuation, new blockbuster products for the holiday season, the attractive long-term growth opportunities that lie ahead and the company's ability to distribute significant cash flow to investors." Over the weekend, Paczkowski pointed out that the pre-holiday decline in Apple share price is a "historical pattern ... Apple shares slip late in the year amid profit-taking and some irrationality or other. And then the company reports monster first-quarter earnings in January and they spike."
Two Apple officials cash in some stock
Just in time to purchase a new yacht or luxury home for the holidays, a pair of Apple officials just sold some of their company stock in exchange for cold, hard cash. According to SEC filings released by the company, Apple general counsel Bruce Sewell sold 2,438 shares of AAPL at about US$549 and another 2,700 shares for about $550 per share. The sale of shares last Thursday netted Sewell about $2.8 million. Sewell had also sold 5,137 shares of AAPL stock on November 1, pulling in more than $3 million. Apple Chairman of the Board Arthur Levinson also sold shares last Thursday. He let go of 7,500 shares valued at $560.65 for a payday of $4.2 million. Why are they selling some of their shares? Who knows. It could be to avoid paying taxes at an expected higher rate in 2013, or they might just need the cash to buy some holiday gifts.
Daily Update for October 24, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Wall Street analysts weigh in on the iPad mini
Although Apple's stock fell sharply after the event yesterday -- it closed at around US$613 after opening the day at about $631 a share -- most Wall Street analysts are saying that the iPad mini will be a hit with consumers. The $329 starting price of the iPad mini was seen by Chris Whitmore of Deutsche Bank as a "modest disappointment," although he said that the features of the mini more than make up for the higher-than-expected price point. Many analysts, including Whitmore, believed Apple would offer a base model with only 8 GB of storage and were surprised by the starting capacity of 16 GB. Whitmore also feels that the build quality of the aluminum unibody iPad mini will also justify the $130 price premium over Android competitors such as the Google Nexus 7 and Amazon Kindle Fire HD. The competing devices are made of plastic and glass. Deutsche Bank is maintaining its $850 price target for AAPL shares. Also chiming in was Charlie Wolf of Needham & Company, who thinks the new iPad mini will expand the overall market, and make life difficult for lower-priced competitors. To quote Wolf's comments about the competition, "none compare with this device, in our opinion, which is a full-featured iPad except for its size. All 275,000 iPad applications can run on it without modification." Needham's price target of $750 for AAPL remains the same. Sterne Agee's Shaw Wu had predicted a price point for the iPad mini between $299 and $349, so the $329 price tag fit his expectations. Wu was quoted as saying, "We continue to believe iPad mini is the competition's worst nightmare and likely to drive incremental volume." AppleInsider has a full rundown of analyst reactions to the littlest iPad. One parting comment from their post notes that "Maynard Um of Wells Fargo Securities believes that Apple arguably has its strongest product lineup in the company's history."
Apple Q4 earnings call scheduled for October 25
Yesterday was the end of Apple's 2012 fiscal year and today, the company announced that it will hold its fourth quarter earnings call on Thursday, October 25 at 5 PM ET. The call will be the first real indication of how the iPhone 5 is doing in the market. As usual, TUAW will offer a liveblog of the earnings call, so stay tuned for further information about how to join our staff for insight into the numbers as they're announced. Interested individuals will also be able to listen in to the streaming audio from the conference call.
AAPL sets another record: $700 in after-hours trading
I've been preaching AAPL for as long as I've been long on the stock -- or about 10 years now. In that time Apple has gone from being just another PC manufacturer to being the most valuable company on the planet and the master of the mobile handset world. Only three years ago, the stock was sitting at a low around $200. But just this calendar year alone the stock has blasted through the $400, $500, and $600 barriers (it crossed $400 in 2011 before falling again). Today the stock has hit another milestone: $700 a share in after-hours trading. The $700 share price now gives AAPL an almost $656 billion evaluation. Crossing the $700 can be seen one of two ways: response to Apple selling 2 million iPhone 5's in just 24 hours or just the natural trajectory of the stock (I tend to view it the second way since the stock went up less than 1.5% on the iPhone 5 news today). While $700 a share sounds like a lot, most analysts put the stock at a $850-950 range and some see it hitting $1,100 a share in the next 12 months. That's mainly due to the still increasing smartphone market and the nascent tablet market -- not to mention AAPL is still only trading with a 16.45PE (Amazon, on the other hand, has a PE of 314). As I said back in 2009, the sky does indeed seem to be the limit. Disclaimer: This author owns shares in AAPL. Opinions in this post are those of the author only and should not be considered as investment advice.
iPhone 5 announcement pushes AAPL to another record high
Apple announced the iPhone 5 last week, and pre-orders of the device were very impressive. According to the Washington Post, Wall Street responded favorably to the news of the iPhone 5, and brisk trading pushed Apple's stock to another record high. Apple opened the day on Friday with a record high stock price of US$689.97, and it didn't stay there for very long. By mid-afternoon, Apple's stock had climbed above $690 and closed out the day at an impressive $691.28. It never crossed the $700 mark, but hovered very close to it, reaching $696.98 at its highest point. With iOS 6 arriving on Wednesday and the iPhone 5 slated to go on sale this Friday, how high do you think Apple's stock will climb this week?
Apple vs. Samsung verdict: How Wall Street is reacting
It's the first full day of Wall Street trading since Friday's Samsung patent infringement verdict, and the markets and analysts are reacting pretty much as expected. AAPL opened trading today at $679.99 a share (up about 2 percent), peaked briefly at $680.87, and is currently moving around the $677 mark. As you'd expect, Samsung's stock is taking a hit. In Monday trading in Seoul, Samsung shares fell by 7.7 percent. Bloomberg pointed out that today's drop in the value of Samsung's stock was the worst since October 28th, 2008. In the long term, most analysts are raising or maintaining their price targets for AAPL. For example, Merrill Lynch's Scott Craig bumped his price target to $770 (up from $720), while Oppenheimer & Co's Ittai Kidron went all bullish, raising his price target from $680 to $800. What about the other big players in the smartphone arena? Google (GOOG), which was the target of Steve Jobs' famous "going thermonuclear" rant, took a big drop this morning and has been wobbling around the $670 per share mark -- down about $8 per share, although there has been a steady rise in share price during the day. Google may see fewer manufacturers willing to use its Android smartphone/tablet OS in the future for fear of Apple legal retribution. On the other hand, shares in Microsoft (MSFT) were up slightly, an indication that the street sees the Windows Phone 8 OS as a safe and litigation-free alternative and also views the licensing agreements in place between Apple and Microsoft as a positive sign. Nokia (NOK), which is partnering with Microsoft to release a number of Windows Phone 8 smartphones, was the biggest beneficiary of the verdict news, up almost 9.6 percent at one point in early trading today.
Daily Update for August 21, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Could AAPL split in a move toward Dow? Bernstein analyst thinks it will
A week after Apple posted its third-quarter earnings for 2012, Bernstein Research analyst A.M. "Toni" Sacconaghi speculates that the time is right for Apple to split its stock if it wants a future spot as an indexed member of the Dow Jones Industrial Average. The Dow is woefully underpopulated with technology companies, Sacconaghi argues, and IBM and Microsoft were added during a time when the PC market was far less mature than the smartphone market is now. But if Apple was to join the DJIA, the price of the stock would have to come down from the current $607 that it's trading at as of this morning. The Dow is a price-based index with few stocks selling more than $100 a share. Granted, this is speculation worthy of Chris Rawson's rumor roundups. Despite some headlines indicating that it's practically a done deal, Sacconaghi's scenario is just that -- a "what if" situation. As Barron's Tiernan Ray rightfully points out, Apple has not indicated that it has any current intention of splitting its shares -- although the company has done so three times before, most recently in 2005. The New York Times's DealBook blog is also considering Apple's fiscal future, pointing out a few possible big-game acquisition targets for the company's ample cash hoard. Writer Andrew Ross Sorkin saves the serious caveats for the end of the post (much of Apple's cash is overseas and cannot be repatriated without a tax hit, for example) after he speculates on some truly blue-sky options for Apple's shopping list. Twitter and Path? Nuance? Sprint? Research In Motion?!? Despite the reports of past talks between Apple and Twitter, none of these seem particularly likely. If we're throwing darts at the stock listings, though, perhaps Apple will fork over $68 billion and take over Comcast, which would gain it 51% of NBC Universal along with millions of paying cable customers. [via Reuters] #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; } #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Talkcast tonight: Profits, taxes and WWDC at 10 pm ET / 7 pm PT
Another quarter, another blowout. While analysts and pundits imagined that domestic iPhone sales would signal an end to the gravy train, international demand pushed the handset past the 35 million mark and shot AAPL back above the $600 line. Even with the iPad refresh hitting at the end of the quarter, Apple sold almost 12 million of the tablets to get to 67 million total sales in just two years on the market. Apple's developer conference, WWDC, opened up ticket sales this week -- and promptly closed them again a couple of hours later as the event sold out. Some ticket buyers who thought they were good to go found out otherwise when Apple's overzealous group ticket restrictions cancelled their valid orders. Meanwhile, The New York Times has been focusing on Apple as a proxy for all things large and corporate lately, and the beat goes on with today's feature story on how the company uses some... interesting tactics to minimize its tax liability in the US and abroad. We'll discuss the story, and consider whether or not slapping a lowercase "i" into a headline works in favor of -- or against -- solid business journalism. That's our rundown for tonight's Talkcast. We welcome your calls, questions and comments at 10 pm ET, 7 pm PT tonight live on Talkshoe. To participate in the call, you can use the browser-only Talkshoe client, the embedded Facebook app, or download the classic TalkShoe Pro Java client; however, for +5 Interactivity, you should call in. For the web UI, just click the Talkshoe Web button on our profile page at 4 HI/7 PDT/10 pm EDT Sunday. To call in on regular phone or VoIP lines (Viva free weekend minutes!): dial (724) 444-7444 and enter our talkcast ID, 45077 -- during the call, you can request to talk by keying in *8. If you've got a headset or microphone handy on your Mac, you can connect via the free X-Lite or other SIP clients -- basic instructions are here. Skype users with dial-out credit can call in via the service, or use those free iPhone minutes. Talk to you tonight!
Apple will webcast Q212 earnings release conference call on April 24
What is arguably the most anticipated earnings call on Wall Street every quarter will take place next Tuesday, April 24th at 2pm PT/5pm ET. That's when Apple will release its earnings report for the second quarter, which ended March 31st. There's lots of speculation about whether Apple will hit consensus estimates for their Mac products -- notably iMacs and MacBook Pros, which have not seen major updates in almost a year. However it's generally assumed that the launch of the new iPad in this quarter will help Apple offset any missed Mac numbers. In the run up to the earnings call this week, Apple's stock has swung wildly, having its largest ever point drop on Monday, followed by its largest ever point gain on Tuesday, before falling over 3% again on Wednesday. AAPL shares are up 45% YTD. TUAW will have complete coverage of next Tuesday's financial results.
Report: iPhone 4S sales slowing in developing market
Analyst T. Michael Walkley of Canaccord Genuity told investors in a Thursday research note that iPhone 4S sales are slowing in "certain developed markets," according to a report by AppleInsider. Some of this slowdown can be attributed to a fresh crop of dual-core and quad-core Android phones coming out soon. Walkley also notes that some customers may be waiting for the next generation iPhone to arrive. Walkley writes, "For example, our March channel checks at Verizon indicated a stronger mix of LTE smartphones, and we believe Verizon has strong June quarter promotions planned for LTE Android smartphones." Despite this projected slump, Walkley believes global sales of the iPhone will remain strong and expects Apple to announce it sold 32.6 million iPhone handsets in Q2 2012.
Goldman Sachs projects AAPL will hit $750
Goldman Sachs sees a rosy future for Apple despite recent stock dips, expecting stock prices to hit $750 and advising investors to buy ahead of next Tuesday's earnings report. AppleInsider reports that analyst Bill Shope estimates that Apple sold 31.1 million iPhones and 12.5 million iPads in the previous quarter. Mac sales are expected to be "lackluster," he said, but better than Wall Street's expectations. Fortune's Philip Elmer-DeWitt collected the iPhone sales estimates earlier this week and says the six most reliable forecasters have an average target of 35.1 million units, nearly a 90% year-over-year increase. The Q2 earnings call will begin at 2 p.m. PT/5 p.m. ET on April 24.
Daily Update for April 3, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
