Post by Luckychoices on May 6, 2017 18:39:28 GMT -8
IMO, this a pretty harsh reading of Apple's earnings. The stock's movement since earnings indicates many do not agree with the author.
Apple's Earnings Results Were Dismal: We're Moving To The Sidelines by Alex Cho
This author had posted an article titled, "Buy Apple Ahead Of Its Earnings Announcement" on 04/28/17 but, of course, had the disclosure, "I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours". So he didn't *own* any AAPL himself but was advising his subscribers to buy. Call me crazy but I like to read articles where the author is financially involved with the stock. Going long, trading, shorting...I don't care. But talk is cheap and I like to see authors that have the strength of their convictions and pony up their own money to follow the advice they're giving to others.
But if this sounds just like the kind of investment advice for which you're looking, he has two choices for subscribers:
1. 2 week free trial, then $60/month
2. 2 week free trial, then $480/year($40.00/month - Save 33.3%)
*My absolutely free advice, which is guaranteed to save you $480/year, is to buy as much AAPL as you can afford_and don't sell it.
This is Wiseyou's response, both to the article and to Apple's earnings. Again, I'm posting his comment because I found it interesting and informative to read his analysis of the recent earnings.
========================
Wiseyou
Comments (343) |Following |Send Message
@alex Cho
I am sorry to hear that you have decided to move to the sidelines. I understand the revision of the near-term target to 137 based on your models. However, many of the positive sales reports concerning Apple are still in place and likely to kick in during FQ3''17. In my opinion, analysts are comparing Apple earnings against their own overly optimistic expectations. The more worthwhile comparisons are with year-over-year (YOY) changes. If you look at Apple's figures from a YOY perspective, Apple Q2'17b exceeded Q2'16 numbers in almost all categories.
1. Net sales increased 4.63% YOY from $50,557 to $52,896 MM.
2. Gross margin increased 3.36% YOY from $19,921 to $20,591 MM
3. Operating income increased 0.79% YOY from $13,987 to $14,097 MM
4. Other income increased 278% YOY from $155 to $587 MM
5. Net income increased 4.88% YOY from $10,516 to $11,029 MM
6. Earnings per share increased 10.47% YOY from $1.91 to $2.11
7. Cash dividends per share increased 9.62% YOY from $0.52 to $0.57
8. American revenues increased 10.79% from $19,096 to $21,157 MM
9. European revenues increased 10.39% from $11,535 to $12,733 MM
10. Japanese revenues increased 4.77% from $4,281 to $4485 MM
11. Rest-of-Asia revenues increased 20.13% from $3,159 to $3,795 MM
12. Mac unit sales increased 4.09% from 4.034 to 4.199 MM
13. iPhone revenues increased 1.19% from $32,857 to $33,249 MM
14. Mac revenues increased 14.43% from $5,107 to $5,844 MM
15. Services revenues increased 17.53% from $5,991 to $7,041 MM
16. Other product revenues increased 31.25% from $2,189 to $2,873 MM
17. Total product revenues increased 4.63% from $50,557 to $52,896 MM
The only three things that dropped YOY were
1. iPhone unit sales decreased -0.84% from 51,183 to 50,753 MM
2. IPad unit sales decreased -12.96% from 10,251 to 8,922 MM
3. IPad revenues decreased -11.85% from 4,313 to 3,889 MM
It is true that Apple's FQ2'17 results beat FQ2'16 results by 3.3% but they do not beat FQ2'15 results. Apple still has not caught up to their 2015 results. This may be because Apple was still not firing with all its cylinders in FQ2'17. In March, Apple announced a significant reduction in the price of the base iPad to $329 for an iPad that is better than iPad Air 2, the most popular iPad of all time. They have not announced any upgrade of the the iPad Pro lines. Therefore, it was not surprising that iPad sales declined 13% YOY with a corresponding decline in revenues by 12%. If that iPad 9.7" announcement had been made earlier and the iPad Pro lines launched earlier, this would have arrested the decline. Apple's revenues could have been up by a billion or more.
This leaves the disappointing but slight decline in iPhone unit sales by 0.84% YOY compared to FQ2'16, holding the increase of iPhone revenues to only 1.19%. Given the 42% share of smart phone activations in January and February, many of us expected Apple to do better with their iPhone sales. However, we should remember that there was a lot of buzz surrounding Samsung's S8 launch and there were many pre-orders for the S8 at the end of the March. At that time, the reports of the red screen, spontaneous shutdowns, and selfie pictures fooling the facial recognition had not yet appeared. This may have suppressed sales of iPhone.
In my opinion, all this is setting up Apple for a better FQ3'17. Both Huawei and Samsung's latest models have proven to be somewhat disappointing and Tim Cook pointed to an channel reduction for iPhones that would wiped out the slight reduction in unit iPhone sales. We should expect iPhone and iPad sales to pop up several percentage points this coming quarter. Mac, Watch, and AirPod sales are surging and should continue into the quarter. Service will continue to grow at double digit increases. While AAPL may dip transiently in the coming weeks, I believe that FQ3'17 has potential to significantly exceed both Apple's guidance and analyst expectation. People who sell now may miss out on both this increase as well as any positive news concerning a tax holiday for repatriation of overseas and reduce corporate taxes.
03 May 2017, 11:40 AM Report Abuse Reply 25 Like
========================
Apple's Earnings Results Were Dismal: We're Moving To The Sidelines by Alex Cho
This author had posted an article titled, "Buy Apple Ahead Of Its Earnings Announcement" on 04/28/17 but, of course, had the disclosure, "I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours". So he didn't *own* any AAPL himself but was advising his subscribers to buy. Call me crazy but I like to read articles where the author is financially involved with the stock. Going long, trading, shorting...I don't care. But talk is cheap and I like to see authors that have the strength of their convictions and pony up their own money to follow the advice they're giving to others.
But if this sounds just like the kind of investment advice for which you're looking, he has two choices for subscribers:
1. 2 week free trial, then $60/month
2. 2 week free trial, then $480/year($40.00/month - Save 33.3%)
*My absolutely free advice, which is guaranteed to save you $480/year, is to buy as much AAPL as you can afford_and don't sell it.
This is Wiseyou's response, both to the article and to Apple's earnings. Again, I'm posting his comment because I found it interesting and informative to read his analysis of the recent earnings.
========================
Wiseyou
Comments (343) |Following |Send Message
@alex Cho
I am sorry to hear that you have decided to move to the sidelines. I understand the revision of the near-term target to 137 based on your models. However, many of the positive sales reports concerning Apple are still in place and likely to kick in during FQ3''17. In my opinion, analysts are comparing Apple earnings against their own overly optimistic expectations. The more worthwhile comparisons are with year-over-year (YOY) changes. If you look at Apple's figures from a YOY perspective, Apple Q2'17b exceeded Q2'16 numbers in almost all categories.
1. Net sales increased 4.63% YOY from $50,557 to $52,896 MM.
2. Gross margin increased 3.36% YOY from $19,921 to $20,591 MM
3. Operating income increased 0.79% YOY from $13,987 to $14,097 MM
4. Other income increased 278% YOY from $155 to $587 MM
5. Net income increased 4.88% YOY from $10,516 to $11,029 MM
6. Earnings per share increased 10.47% YOY from $1.91 to $2.11
7. Cash dividends per share increased 9.62% YOY from $0.52 to $0.57
8. American revenues increased 10.79% from $19,096 to $21,157 MM
9. European revenues increased 10.39% from $11,535 to $12,733 MM
10. Japanese revenues increased 4.77% from $4,281 to $4485 MM
11. Rest-of-Asia revenues increased 20.13% from $3,159 to $3,795 MM
12. Mac unit sales increased 4.09% from 4.034 to 4.199 MM
13. iPhone revenues increased 1.19% from $32,857 to $33,249 MM
14. Mac revenues increased 14.43% from $5,107 to $5,844 MM
15. Services revenues increased 17.53% from $5,991 to $7,041 MM
16. Other product revenues increased 31.25% from $2,189 to $2,873 MM
17. Total product revenues increased 4.63% from $50,557 to $52,896 MM
The only three things that dropped YOY were
1. iPhone unit sales decreased -0.84% from 51,183 to 50,753 MM
2. IPad unit sales decreased -12.96% from 10,251 to 8,922 MM
3. IPad revenues decreased -11.85% from 4,313 to 3,889 MM
It is true that Apple's FQ2'17 results beat FQ2'16 results by 3.3% but they do not beat FQ2'15 results. Apple still has not caught up to their 2015 results. This may be because Apple was still not firing with all its cylinders in FQ2'17. In March, Apple announced a significant reduction in the price of the base iPad to $329 for an iPad that is better than iPad Air 2, the most popular iPad of all time. They have not announced any upgrade of the the iPad Pro lines. Therefore, it was not surprising that iPad sales declined 13% YOY with a corresponding decline in revenues by 12%. If that iPad 9.7" announcement had been made earlier and the iPad Pro lines launched earlier, this would have arrested the decline. Apple's revenues could have been up by a billion or more.
This leaves the disappointing but slight decline in iPhone unit sales by 0.84% YOY compared to FQ2'16, holding the increase of iPhone revenues to only 1.19%. Given the 42% share of smart phone activations in January and February, many of us expected Apple to do better with their iPhone sales. However, we should remember that there was a lot of buzz surrounding Samsung's S8 launch and there were many pre-orders for the S8 at the end of the March. At that time, the reports of the red screen, spontaneous shutdowns, and selfie pictures fooling the facial recognition had not yet appeared. This may have suppressed sales of iPhone.
In my opinion, all this is setting up Apple for a better FQ3'17. Both Huawei and Samsung's latest models have proven to be somewhat disappointing and Tim Cook pointed to an channel reduction for iPhones that would wiped out the slight reduction in unit iPhone sales. We should expect iPhone and iPad sales to pop up several percentage points this coming quarter. Mac, Watch, and AirPod sales are surging and should continue into the quarter. Service will continue to grow at double digit increases. While AAPL may dip transiently in the coming weeks, I believe that FQ3'17 has potential to significantly exceed both Apple's guidance and analyst expectation. People who sell now may miss out on both this increase as well as any positive news concerning a tax holiday for repatriation of overseas and reduce corporate taxes.
03 May 2017, 11:40 AM Report Abuse Reply 25 Like
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