Written by Jillian Friesen, GEI Associate
Econintersect: Today Apple released its earnings report for its 2013 1st quarter, which ended on December 29th 2012. In this 13- week period, Apple sold over 47.8 million iPhones, 22.9 million iPads, 4.1 million Macs and 12.7 million iPods. Sales of iPhones and iPads hit record numbers while the consumption of Macs and iPods dwindled. Quarterly revenue was up by $8.2 billion. Average weekly revenue was recorded at $4.2 billion up $0.9 billion a year ago. Apple’s CEO Tim Cook was optimistic stating:
“We’re very confident in our product pipeline as we continue to focus on innovation and making the best products in the world.”
Apple released its first quarter fiscal year 2013 results in a conference call. The audio will be available for an additional two weeks. Projected earnings, operation costs and other expenses as well as topics of intellectual property and product quality were discussed in the conference call. Investors are responding with mixed feelings. Click the image below to listen to the Apple conference call.
(Note: Streaming audio requires certain devices such as QuickTime 7 or greater).
Click on the image below to hear the audio.
The announcement did little to settle Wall Street and the concerns of those who are apprehensive about Apple’s (AAPL) continued phenomenal growth. In the past decade, the cummulative growth rate has been recorded at around 3,000%. Traders on Wall Street estimated shipments of around 50 million iPhones. The actual purchases of iPhones was around 47.8 million, just enough to make investors uneasy. Over the past couple of months, several reports have come out reporting a slowdown in demand for Apple products.
Still there are those who continue to remain optimistic and view Apple as a prime example of an excellently run and innovative company, traits which are not readily seen in other enterprises. Mark Moskowitz, from J.P. Morgan is currently scoring Apple as “overweight” with a destination price of $725. This puts Apple in a good “buy” position and gives hope to investors who are holding onto their stock.
Apple has been in the habit of under promising and over delivering (UPOD). This bodes well for those who are worried about the value of their Apple shares. Moskowitz as well as others believe much of investor concern over Apple stock has been due to the changes in gross margin over time. Apple CEO, Tim Cook warned of gross margins going down due to the efforts Apple has implemented to refresh its product line. In a sense, it was expected.
Keith Bachman from BMO Capital Markets had an alternative point of view:
“In years past, investors have bought disappointing guidance and usually have been rewarded over time. However, with such negative sentiment surrounding the stock, we do not think investors will use conservative guidance to buy the stock in the near term.”
Here is a run-down of the numbers:
| Item | Actual | Expected |
| iPhone Sales | 47.8 million | 50 million |
iPad Sales | 22.9 million | 23 million |
| iPod Sales | 12.7 million | 12 million |
| Mac Sales | 4.1 million | 5 million |
| Gross Margin | 38% | 38% |
| Revenue | 54.5 million | 55 million |
Apple traded down 9.8% in market after hours to a price of $463. 49.
The stock had traded up 1.8% during the day Wednesday as Apple fanboys anticipated a strong report. When the company delivered the announcement the response was like apples being sent to a cider mill: Apple was crushed.
Investors are anxiously awaiting tomorrow to see how much of a recovery can be mounted.
Sources:
- Apple: Press Info
- MarketWatch: Apple Below $500 After Hours on Weak View
- Yahoo Finance: Apple Quotes Summary, 7:59 pm 23 january 2013
Related Articles
Investing articles on Apple
