View Single Comment


  1. Phil

    What the Hell was that?  

    Seriously, up to $430 and now back to $406?  Oh well, as long as they're buying their own stock at this price I'm thrilled.  Conference call killed it – no promise of new product but, on the other hand, if that was the guidance WITH new products, THEN I'd be concerned.  The guidance they gave with no new products is fine with me.  

    Apple (AAPL): FQ2 EPS of $10.09 beats by $0.02. Revenue of $43.6B (+11% Y/Y) beats by $1.1B. 37.4M iPhones, 19.5M iPads, just under 4M Macs. Expects FQ3 revenue of $33.5B-$35.5B, below $39.3B consensus. Buyback increased by $50B. Shares halted. CC at 5PM ET (webcast). (PR)

    More on Apple: Quarterly dividend increased by 15% to $3.05/share (3% yield); Apple "plans to borrow" to return cash. FQ2 iPhone and iPad sales beat expectations, Macs a little light. Gross margin was 37.5%, at low end of guidance range of 37.5%-38.5% and -990 bps Y/Y. Apple expects to return $100 in cash via capital return program by end of 2015, up from prior $45B. Exc. retail, Americas revenue +7% Y/Y, Europe +11%, Greater China +8%, Japan +19%, rest of Asia-Pac +26%, Retail +19%. iPhone revenue only +3% Y/Y, iPad +40%, Mac +7%, iPod -20% on 5.6M units. AAPL halted, to resume trading at 4:50PM. (PR)

    A little more on Apple: Implied FQ2 iPhone ASP of $613, down from FQ1's $641 (was emerging markets discounting or a mix shift to older iPhones the culprit?). iPad ASP was $449, down from FQ1's $467 (shift to iPad Mini). Mac ASP of $1,378, up from FQ1's $1,359. iTunes/Software/Services revenue +30% Y/Y to $4.11B. Accessories +15% to $1.38B. R&D spend +33% Y/Y to $1.12B, SG&A +14% to $2.67B. Cash balance stood at $145B at quarter's end, up from prior $137B. 

    Tim Cook (AAPL) on the five-inch smartphone: "Our competitors have made some significant trade-offs in many of these areas in order to ship a larger display. We would not ship a larger display iPhone while these trade-offs exist." He adds that if IDC's right, the tablet market declined 30% since December, so Apple's decline of 15% beat the market. 

    David Einhorn likes Apple's (AAPL) feisty share buyback : "We applaud Apple's decision to borrow money and return excess capital to shareholders, an idea that was off the table only months ago. This positive development represents a more shareholder friendly capital allocation policy and demonstrates the conviction of Apple's management and board in the Company's future."

    More from Apple's (AAPL) FQ2 call: Mix shift towards iPhone 4 responsible for iPhone ASP drop; iPhone channel inventory up 1M Q/Q. Greater China sell-thru growth was 18% Y/Y, above reported (sell-in) 8%. Revenue mix shift towards iPad hurt gross margin, expected to fall to 36%-37% in FQ3 due to lower revenue and mix, partly offset by lower costs. Tim Cook talks of "exciting new product categories" (an iWatch?). While Cook said competitors made tradeoffs to offer ~5" phones, he didn't mention one-handed use (Apple's traditional critique) – is he hinting one will eventually arrive? AAPL -0.3% AH, as investors focus on FQ3 guidance (implies rev. growth of -4% to +2% Y/Y). CRUS -1.9%. (transcript) (previous)

    Here's the transcript.

     

    CC highlights:

    • Revenue for the quarter was $43.6 billion compared to $39.2 billion in the year ago quarter, an increase of $4.4 billion or 11% and $600 million over the high end of our guidance range.
    • Our revenue for the first half was over $98 billion and our net income was over $22 billion. During that time we sold 85 million iPhones and 42 million iPads. These are very, very large numbers unimaginable given to us just a few years ago.
    • Our revenues grew about $13 billion in the first half of the fiscal year. Event though that’s like adding the total first half revenue of Fortune 500 companies, our average weekly growth slowed to 19% and our first closure levels of a few years ago. Our 2012 results were incredibly strong and that’s making comparisons very difficult this year. Last year our business benefited from both high growth and demand per products and a corresponding growth in channel inventories along with the virtual mix of higher gross margin products and more favorable foreign currency environment and historically low cost.
    • Take the smartphone market for example IDC estimates that this market will double between 2012 and 2016 to an incredible 1.4 billion units annually and gardening into the tablet market is growing at an even faster rate from a 125 million units in 2012 to a projected 375 million by 2016.
    • An aggressive plan that more than doubles the size of the capital return program we announced last year to a total $100 billion by the end of calendar year 2015.  In addition, the share repurchases we are increasing our current dividend by 15% to further appeal to investor seeking yield.  
    • Based on research published earlier this month by comScore, iPhones garnered the number one spot in the U.S. smartphone market for the three-month period ended in February with 39% share, up from 35% in the previous (inaudible) period. In Japan, IDC, Japan announced that iPhone gained the number one position for all of calendar year 2012 as well as for calendar Q4 2012 in both handsets and smartphones. It’s also for the first time, a non Japanese company has achieved the number one spot for an entire year.
    • Turning to iPad we were thrilled to 19.5 million iPad during the quarter, compared to 11.8 million in the year ago quarter that’s an increase of 7.7 million units or 65%.  The most recent (inaudible) indicated a 96% satisfaction rate among iPad customers. 
    • First let me start with the tablet side, the numbers that we’ve seen from IDC would indicate that they believe the market in March declined by 30% from December, December being obviously seasonally high quarter with a holiday. As you can see from our numbers, we declined 15% and so if that holds, we did much better than the market and had a very nice pick up in market share.
    •  I think the reason that we were down last quarter, (inaudible) as Peter mentioned, the market for PCs are incredibly weak. I did see – said that the market for the March quarter was down 14% year-on-year which is the largest decline that I remember from being in this industry for long time. At the same time we sold almost 20 million iPads and it’s certainly true that some of those iPads cannibalize some Macs. 
    • Cumulative app downloads have surpassed 45 billion and app developers have made over $9 billion for their sale through the App Store, including $4.5 billion in the most recent four quarters alone. 
    • I’d now like to turn to the Apple retail stores. Revenue for the quarter was $5.2 billion compared to $4.4 billion in the year ago quarter, (inaudible) 19%. This was primarily by strong sales at iPhone and iPad. We ended the quarter with the total 402 stores including a 151 outside the United States. We expect to open about 30 new stores in total in fiscal 2013 and at least 20 stores in August. With an average of 401 open in the March quarter, average revenue per store was $13.1 million compared to $12.2 million in the year ago quarter. The segment income was $1.1 billion.  We had $91 million visitors to our stores during the quarter compared to $85 million in the year ago quarter.
    • And turning to our cash, we ended the quarter with $144.7 billion in cash for short-term and long-term marketable securities. From $137.1 billion at the end of the December a sequential increase of $7.6 billion overall $2 billion (??) of our total cash was off shore at the end of the March quarter
    • And cash flow from operations was $12.5 billion. We paid $2.5 billion of dividend in the March quarter and earlier this month we concluded $1.95 billion dollar accelerated share repurchase program that we initiated in the December quarter. Resulting in the retirement of over 4 million shares of Apple stock.

    Certainly not a stock we're upset to own long-term but I think we'll have a lot of opportunities to sell calls while we wait for things to pick up into 2014.  



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.

 
 
 

Phil's Favorites

Can Trump make real change as president?

 

Can Trump make real change as president?

Courtesy of Sharece Thrower, Vanderbilt University

Based on his erratic behavior during the campaign, many fear what Donald Trump will do in office. Some believe that his strong personality could lead to disastrous policies that could negatively affect health care, nuclear warfare and other aspects of our lives.

As a scholar of presidential power, I’d suggest such concerns are likely overblown. Despite his distinct individuality, Trump faces the same institutional constraints as any other president. In the end, he may be a more predictable president than many would believe.

From individual to the institutional

Political scientists have long been...



more from Ilene

Zero Hedge

Senate Confirms Mattis (Defense) & Kelly (Homeland) On Trump's First Day

Courtesy of ZeroHedge. View original post here.

Just hours after President Trump was sworn into office, amid Chuck Schumer's jabs over HUD, the Senate has confirmed retired Marine General James Mattis as defense secretary and retired Marine General John Kelly as homeland security secretary. They were both expected to be confirmed easily, and were, but Democrats promised fights over several other nominees.

Mattis was the first to be confirmed by a vote of 98...



more from Tyler

ValueWalk

Europe Rose Because Of Jurisdictional Competition

By The Foundation for Economic Education. Originally published at ValueWalk.

During the dark ages, nations like China were relatively advanced while Europeans were living in squalid huts.

Governments were forced to adopt better policies because labor and capital had significant ability to cross borders in search of less oppression.

But that began to change several hundred years ago. Europe experienced the enlightenment and industrial revolution while the empires of Asia languished.

What accounts for this dramatic shift?

I’m not going to pretend there’s a single explanation, but part of the answer is that Europe benefited from decentralization and jurisdictional competition. More specifically, governments were forced to adopt better policies because labor and capital had significant ability to cross borders in searc...



more from ValueWalk

Kimble Charting Solutions

Mr. President you want this to hold, says Joe Friday

Courtesy of Chris Kimble.

Consumer Confidence of late has continued to move higher, now reaching above the highs hit back in 2007. Long-Term S&P 500 returns are far below historical norms, when confidence is this high. We are not saying that high consumer confidence means the market is at a top!

Below is a look at the Advance/Decline line on a short-term basis.

CLICK ON CHART TO ENLARGE

Joe Friday Just The Facts; It could be important for support to hold, of this bearish rising wedge above.

...

more from Kimble C.S.

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Oil and Trump: Russians full of optimism in Davos (Reuters)

Twelve months ago, the mood of the Russian delegation at the World Economic Forum in Davos was distinctly gloomy, with oil prices near 12-year lows below $30 per barrel and Western sanctions depressing their economy and financial markets.

The Mortgage Market’s $1 Trillion Pocket of Worry (The Wall Street Journal)

Bonds backed by certain risky single-family mortgages topped $1 trillion for the first time in November, crossing that threshold amid rising warnings for one corner of the housing market.

...



more from Paul

Chart School

Small Cap Losses Accelerate

Courtesy of Declan.

Small Caps again took the brunt of the selling as Shorts took advantage of yesterday's small rally back to former support (turned resistance) to enter positions. With the 'bull trap' in full effect, the next target down for the index is 1,308. Of supporting technicals, only Stochastics [39,1] is left to break its bullish alignment,


The S&P took a modest loss, but not enough to break it out of its consolidation. Volume was also lighter. With the Russell 2000 on the way down, it's suggesting the S&P will follow suit....

more from Chart School

Members' Corner

How To Poop At Work?

Courtesy of Nattering Naybob.

Once again it's "in the Toilet Thursday" or "Thursday's in the Loo". 

In our last episode, How to Poop On A Date? we were graced with a delicate shituation: what ever to do when your finally back at her place, snuggling in for a little "brown chicken brown cow" and you get hit with "Love Potion #2".

This week in How to Poop At Work? ,what to do when your at a big fancy pants meeting, when out of nowhere, you need to download a brown load?



...

more from Our Members

OpTrader

Swing trading portfolio - week of January 16th, 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

Digital Currencies

China's Bitcoin Exchanges Suspend Margin Trading

Courtesy of Zero Hedge

China's bitcoin traders who use the most popular bitcoin exchange not only in China, but also the entire world, BTCChina, were met with an unexpected warning on Friday:

Starting from January 12th, 2017, BTCChina has suspended margin loan service. If you have any questions, please contact Customer Service: support@btcc.com.

BTCChina, which commands over 37% of global bitcoin trading...

... wasn't alone.

Fo...



more from Bitcoin

Mapping The Market

If we try it enough, it will work.

Via Jean-Luc

Brownback wants Trump to emulate what he did in Kansas because it worked so well:

Sam Brownback Calls on Donald Trump to Mimic His Kansas Tax Plan

By RICHARD RUBIN and  WILL CONNORS

Sam Brownback, the Kansas governor whose tax cuts brought him political turmoil, recurring budget holes and sparse evidence of economic success, has a message for President-elect Donald Trump: Do what I did.

In 2013, Mr. Brownback set out to create a lean, business-friendly government in his state that other Republicans could replicate. He now faces a $350 million deficit when the Kansas legislature convenes in January and projections of a larger one in 2018. The state’s economy is flat and his party is fractured...

...

more from M.T.M.

Biotech

The Medicines Company: Insider Buying

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

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

more from Biotech

Promotions

Phil's Stock World's Las Vegas Conference!

 

Come join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

Beginning Time:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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 >>