Apple`s profit and margins slid

Last year, Apple`s earning rose 61% in september 2012, but fell this year for the first time in at least a decade. On a conference call yesterday Mr. Tim Cook said that fourth-quarter profits slipped roughly 8.5%. Earnings: 7,5 billion in Q3, per diluted share, 2013 (8,2 billion in Q3 2012). EPS:$8,26 in Q3, 2013 ($8,67 in Q3, 2012). Revenue is $37,5 billion. Gross margin came in at 37 percent compared to 40 percent in the year-ago quarter.

Right after the results was released, the stock fell as much as 5,1%. After the closing bell, Apple was trading at $529,88. It is down about 25% since the top in September 2012 following the debut of the Iphone 5. Apple is not a growth company anymore. I hope the holiday season can change that.

Apple sold 33.8 million iPhones, (record for the September quarter), compared to 26.9 million in the year-ago quarter. They sold 14.1 million iPads during the quarter, compared to 14 million in the year-ago quarter. Mac sales came in at 4.6 million, down slight from 4.9 million in the year-ago quarter.

Mr. Tim Cook reported its best quarter in education ever, generating over $1 billion in revenue on sales of iOS and Mac products, including iPads, which took a staggering 94 percent tablet marketshare in schools.

Apple have a huge competition from Samsung, Amazon, Google and Microsoft. Lower-priced products from Samsung are taking marketshares along with the other mentioned companies above. Q4 is a very important season for Apple, and Chief Executive Officer Tim Cook is planning to sell new IPhones and Ipads at the end of this year.

Apple have spent a lot of time in their inovation this summer, and they are exploring new product categories with “significant opportunities,” Tim Cook said on a conerence call today. They will release a new iPad Air on Nov. 1. Later on, they will follow up with their new iPad mini with a high-definition screen.

Apple is happy to go into the holidays with their new products like iPhone 5c, iPhone 5s, iOS 7, the new iPad mini with Retina Display and the icredibly thin and light iPad Air, new MacBook Pros, the radical new Mac Pro, OS X Mavericks and the next generation iWork and iLife apps for OS X and iOS. The new iPhone will be available in 100 countries by the end of the year.

Not only the competitors are pressing Apple on margins. The shareholders are giving them some pressure too. Investor Carl Icahn (The one I wrote about, selling 50% of his shares in Netflix) has publicly said he want Apple to initiate a $150 billion buyback to boost the company`s stock price.

Apple paid out $36 billion in dividends and buybacks in the past 5 quarter, and are now discussing what to do with their cash. News on that case will follow early in 2014. Apple`s cash dividend will be $3,05 per share of the common stock, and is payable on November 14, 2013, to shareholders of record as of the close of business on November 11, 2013.

Market participants will continue to look at the earnings this week, as well as the FOMC meeting that will be released on Wednesday. News today: Core Retail Sales/Retail Sales & PPI at 8:30am, CB Consumer Confidence at 10:00am.


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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