View Single Comment


  1. Phil

    CNBC holding a gleeful funeral for AAPL.  

    AAPL's Conference Call.

    Funny how these word clouds can sometimes sum things right up:  "Company Introduced New Products" – that pretty much sums up the Q and explains the thin margins with $1Bn spent on R&D, which is $700M more than usual, which is 5% of the profits and accounts for the shortfall in gross margin.  

    Also ignored by analysts is the 13 week quarter vs 14 weeks last year (7%) as a huge handicap.  Guidance did not make up for things though but they are still well on track to make $45Bn+ this year – and that's a p/e of 10.  AAPL sells $4Bn worth of stuff a week and makes $1Bn and a week was missing from this Q – keep that in mind…

    They also bought back $4.5Bn in stock (1%), probably the best thing they could have done with their cash at these prices. Plans on giving back $15Bn a year to shareholders, which indicated dividend will be closing in on 3%. 

    Other highlights from the CC:

    500M iOS devices sold – 10 per second in the last Q (80M) so overall iOS sales are accelerating.  

    Cook reminds people quarter was short a week – no mention on CNBC, that's for sure

    Average weekly revenue was $4.2Bn vs $3.3Bn last year – up 27%

    This also explains drop in operating margins: "For segment reporting purposes we’re allocating certain manufacturing cost and variances including cost related to product tooling and manufacturing process equipment to our operating segments instead of including these expenditures in corporate expenses as we have done in the past."

    "We were very pleased to sell 47.8 million iPhones compared to 37 million in the year ago quarter, an increase of over 10 million iPhones."

    "This represents a rate of almost 3.7 million iPhones per week in the current year quarter compared to 2.6 million per week in the year ago quarter."

    "That’s an average increase of 39% per week consistent with IDC’s latest published forecast for the global smartphone market in the December quarter." – In other words, no loss of market share globally. 

    "And on a sequential basis iPhone sales grew 78% over the September quarter’s results. That’s over 3.5 times IDC’s latest published projection for sequential growth of the overall market resulting in iPhone market share growth."

    "Turning to iPad, we were thrilled to sell 22.9 million iPads during the quarter compared to 15.4 million in the year ago quarter. That translates to over 1.7 million iPads per week in the current year quarter compared to 1.1 million per week in the year ago quarter, an average increase of 60% per week, ahead of IDC’s latest published estimate of 56% growth for the tablet market."

    "As we projected a quarter ago, we were significantly constrained with respect to the new iMacs and were only able to ship them for the final month of the December quarter. We believe our Mac sales would have been much higher absent those constraints. "

    "Moving to iPod, we sold 12.7 million iPods compared to 15.4 million in the year ago quarter."

    "iTunes generated record results with revenue of $2.1 billion in the quarter."

    "The App Store had a record-breaking December quarter with over 2 billion downloads in the month of December alone. The App Store now offers more than 775,000 apps to over 0.5 billion account holders in 155 countries"

    "we’re delighted to have paid our app developers over $7 billion for sales"

    "Apple retail stores, revenue was in all-time high of over 6.4 billion with growth yield primarily by record iPhone and iPad sales. We opened in total 11 new stores during the quarter including four new stores in Greater China. We excited the quarter with 401 stores, a 150 of which are outside United States. We also relocated or expanded 14 stores that had outgrown their former space during the quarter. With an average of 396 stores opened, average revenue per store was 16.3 million or 1.25 million per store per week compared to 1.22 million per store per week in the year ago quarter. Retail segment income was 1.6 billion."

    "Operating expenses were $3.9 billion included $460 million in stock based compensation expense. (Inaudible) was $462 million and the tax rate for the quarter was 26%. Turning to cash, our cash plus short term and long term marketable securities totaled a $137.1 billion at the end of the December quarter compared to a $121 billion at the end of the September quarter, a sequential increase of almost $16 billion."

    "The increase in cash was net of 2.5 billion in dividends paid and 2 billion in an upfront payment in conjunction with our accelerated share repurchase program. Over 94 billion of our total cash was offshore at the end of the December quarter. Cash flow from operations was a record 23.4 billion growing by almost 6 billion year-over-year of 33% increase. Our Board of Directors has declared a dividend of $2.55 for common share payable on February 14th, 2013 the shareholders at record as of the close of business on February 11th, 2013."

    "For the March quarter we’re providing revenue guidance of between $41 billion and $43 billion compared to $39.2 billion in the year ago quarter. We expect gross margin to be between 37.5% and 38.5% reflecting approximately $90 million related to stock based compensation expense. We expect OpEx to be between $3.8 billion and $3.9 billion including about $480 million related to stock based compensation."

    "I know there has been lots of rumors about order cuts and so forth and so let me just take a moment to make a comment on these, I don’t want to comment on any particular rumor because I would spend my life doing that but I would suggest it's good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on."

    "If you look at the previous year, our Mac sales were about 5.2 million (units). This year, they were 4.1 million and so the difference is 1.1 million. And so let me try to bridge that. iMacs were down by 700,000 units year-over-year. As you remember, we announced the new iMacs late in October and when we announced those, we announced that they would ship, the first one, the 21.5-inch would ship in November and we did ship it at the end of November, we announced that the 27-inch would ship in December and we did ship that in mid-December. And so there were limited weeks of ramping on these products during the quarter, we left the quarter with significant constraints on the iMac. And we believe we know that our sales would have been materially higher if those constraints would not have exist. We tried to tell people this on the conference call in October, I think I said that we would have significant constraints on iMacs, but I recognized to some folks this maybe to surprise.

    Number two, if you look at last year, as Peter went through in his opening comments we had 14 weeks in the quarter. We have 13 weeks in the quarter this year. Last year, in the average week, we sold 370,000 Macs. The third part of the bridge here would be that our channel inventory was down from the beginning of the quarter by over 100,000 units. And that’s because obviously we didn’t have the iMacs channel inventory was in significant constraint. So, if you just take these three factors, they bridge more than the difference of between this year sales and last year sales.

    Now, in addition to these three points, I would point out two other things, and these are lesser things than these other than the total of these other three obviously. One, the market for PCs is weak. IDC’s last estimate I believe was around negative 6%. Two, we sold 23 million iPads and we obviously could have sold more than this, because we could not build enough iPad minis to come into a demand balance. And so there was – we have always said there is some cannibalization there. I am sure there was some cannibalization of Macs there, but the three large factors of it, the aggregated totals of three large, the iMac, the difference in seven days of the previous year having seven extra days and the channel inventory, I think more than explains the difference between this year and the previous year. As a side note, if you looked at our portables alone, they were in line with IDC’s projections of market growth."

    "If you look at our total China, total Greater China, which would include our retail stores that are in China. Our revenues were $7.3 billion in the quarter. So, this is incredibly high, it’s up over 60% year-on-year. And again, that’s comparing 13 to 14 weeks and so it’s really the underlying growth, it’s higher than that. We saw exceptional growth in iPhones into the triple digits."

    "In terms of cannibalization and how we think about this, I see cannibalization as a huge opportunity for us. One, our base philosophy is to never fear cannibalization. If we do, somebody else will just cannibalize it and so we never fear it. We know that iPhone has cannibalized some iPod business. It doesn’t worry us, but it’s done that. We know that iPad will cannibalize some Macs that doesn’t worry us. On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is. And I think it is clear that it is clear that it’s already cannibalizing some and I think there is a tremendous amount more opportunity there. And as you know, I have said for two or three, actually three years now I believe that I believe the tablet market will be larger than the PC market at some point. And I still believe that. And you can see by the growth in tablets and the pressure on PCs that those lines are beginning to converge."

    I think AAPL's biggest mistake was not calling the IPad a Flat Mac, so they could have just kept it in Mac sales and impressed everyone.  Cook also made a point that average selling prices for IPads were down $101 – as the mini is much cheaper – but unit sales more than made up for it, giving them the better overall sales numbers.  

    2,725 not breaking up on the Nas (/NQ) so far.  Not good if we hit resistance there. 

    Playing AAPL/Wombat – We won't know until it opens and we see the option pricing.  On the one hand, if it rebounds quickly, there's no need to do anything and, if it falls further – we'll be glad we waited (assuming our plan is to ride it out, which it still is).  So no need for quick action except, possibly, selling puts if the pricing is favorable. 



To see many more insightful comments, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, and other members-only features - Subscribe to Phil's Stock World by clicking here.

See our disclaimer here.

 
 
 

ValueWalk

2017 List Of The Best Investing Blogs On The Planet

By The Acquirer's Multiple. Originally published at ValueWalk.

Every year Tobias and I sit down to pick out fifty of the best investing blogs on the planet. This list is by no means complete and is certainly not in any particular order. If you’re an investor take some time to read through the great blogs on this list, they’ll provide you with an awesome starting point for your investing education.

If you think we’ve missed a great investing blog, stick it in the comments section below.

Here’s 50 of the best investing blogs on the planet for 2017, plus a couple more:

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

We...



more from ValueWalk

Zero Hedge

In Memoriam, 2017

Courtesy of ZeroHedge. View original post here.

Authored by Robert Gore via StraightLineLogic.com,

You don’t fight for your country, you fight for your government.

The Golden Pinnacle, by Robert Gore

On Memorial Day, America remembers and honors those who died while serving in the military. It is altogether fitting and proper to ask: for what did they die? Do the rationales offered by the military and government officials who decid...



more from Tyler

Phil's Favorites

Investors Slowly Waking to Technology Tailwinds

 

Investors Slowly Waking to Technology Tailwinds

Courtesy of Wade Slome, Investing Caffeine

In recent years, investors have been overwhelmingly been distracted by geopolitical headlines and risk aversion caused by the worst financial crisis in a generation. In the background, the tailwinds of technological innovation have been silently gaining momentum. Although this topic is nothing new for Investing Caffeine followers, the outperformance of technology stocks has been pretty stunning in 2017 (see chart below), with the S&P 500 Technology sector rising almost +20% versus the Non-Tech sector eking out a little more than +1% return. Peered through the style lenses of Grow...



more from Ilene

Market News

Market Moving News

 

Financial Markets and Economy

This is the one thing veterans want you to know about Memorial Day (Business Insider)

Do not thank me for my service because today is not about me at all.

That's what a number of fellow military veterans said, when I asked what they wanted people to know about Memorial Day.

"It's not about us," said Staff Sgt. Jay Arnold, a soldier with the Illinois Army National Guard. "It's about those who went before us."

European Stocks Steady; Italian Banks Fall After Renzi Comments (Bloomberg)

European stocks were steady while shares...



more from Paul

Digital Currencies

One Professional Investor's Take On Bitcoin

Courtesy of Zero Hedge

By Kevin Muir via The Macro Tourist blog

We all know Dirty Harry’s viewpoint about opinions, but I wonder what Detective Callahan would think about today’s bitcoin mania. It seems like every Tom, Dick and Harry feels obliged to weigh in about the manic action of the their favourite virtual currency, yet I am curious how many of these crack pundits have ever even transacted in bitcoin.

I am by no means an expert, but have at least owned bitcoins, mined th...



more from Bitcoin

Chart School

Weekly Market Recap May 28, 2017

Courtesy of Blain.

Another winning week for the bulls, in a year full of them!  Things kicked off with a bang with a gap up Monday as the after shocks of the Comey removal – the one thing that seemed to shake this market for 24 hours – passed in the night.   Wednesday, minutes of the Federal Reserve’s latest policy meeting showed broad agreement on plans to begin shrinking the central bank’s balance sheet and also pointed to a likely rate increase next month, as widely expected.   Another gap up to start the day Thursday and serenity was found for the week.  Every day was up for the S&P 500 to book a weekly finished of +1.4% while the NASDAQ raced ahead +2.1%.

The minutes of the early May meeting showed that members were ...



more from Chart School

Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



more from Our Members

OpTrader

Swing trading portfolio - week of May 22nd, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Biotech

Beyond just promise, CRISPR is delivering in the lab today

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Beyond just promise, CRISPR is delivering in the lab today

Courtesy of Ian HaydonUniversity of Washington

Precision editing DNA allows for some amazing applications. Ian Haydon, CC BY-ND

There’s a revolution happening in biology, and its name is CRISPR.

CRISPR (pronounced “crisper”) is a powerful technique for editing DNA. It has received an enormous amount of attention in the scientific and popular press, largely based on the promise of what this powerful gene e...



more from Biotech

Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



more from Kimble C.S.

Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>