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Apple stock was up 5% in after-hours trading Tuesday when its earnings report turned out to be better than expected – but, not great.
Everyone was bracing for the worst when Apple Inc. (Nasdaq: AAPL) released second-quarter earnings Tuesday after the close. The big question was just how bad things were going to be.
The answer turned out to be… not so awful. The iPhone maker surprised Wall Street with better than expected numbers, mostly because expectations were so low.
However, as expected, forward guidance was glum.
The technology giant reported earnings of $9.5 billion, or $10.09 per share, on revenue of $43.6 billion. That was pretty much in line with analysts' low projections of $10.12 earnings per share and revenue of $41 billion – $43 billion.
"We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad," CEO Tim Cook said in a statement. "Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline."
Looking ahead to the next quarter Apple forecasts sales of $33.5 billion-$33.5 billion with a gross margin of 36%-37%. That's below analysts' expectation of $38.6 billion in sales and a 38.6% gross margin.
Amid growing competition, investors were concerned about a big slowdown in iPhone sales, and rightly so. Apple's iPhones account for 65% to 70% of Apple's profits. The company sold 37.4 million iPhones in Q2, compared to 47.8 million the prior quarter. Apple iPad sales came in at 19.5 million, down from the previous quarter's tally of 22.9 million
On a bright note, Apple boosted its quarterly dividend 15% to $3.05. It also increased its share buyback from $50 billion to $60 billion.
"The longer-term issue is whether Apple has another hit," Brian Colello of Morningstar Research told the Los Angeles Times.
"It's the future of the products that we care most about," chimed in Brian Marshall of ISI Group.
Apple Stock Moves
Indeed, there was a lot riding on Apple's quarter earnings Tuesday.
Apple shares have plunged from an all-time high of $705.05 hit in September 2012. That's a whopping 43.5% decline. Year-to-date, shares are down 25.1%.
Plagued by software blunders, supply constraints, executive shakeups, mounting competition, and the lack of a new "wow" product, investors' perceptions of Apple, once crowned the world's most valuable company, has waned. Institutional shareholders have fled in droves, while value investors wonder if it's time to bite.
Apple stock ended Tuesday at $406, up $7.33, or 1.84%. In after-hours trading, shares jumped $18.87, or 4.56%, at $424.
Markets have logged new highs despite Apple's dreary performance. Thus, the tech behemoth's Q2 earnings report could set an upbeat tone for Wednesday.
For a more detailed look on why Apple stock is down this year – and is not a "Buy" – check out this interview with Money Morning Chief Investment Strategist Keith Fitz-Gerald.
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Apple's earnings; $43.6 billion in sales, 37.4 million iPhones , 19.5 million iPads
I'm not impressed with Apples earning report and I don't understand why people are getting so exited about such a lackluster quarter. Samsung's going to eat Apples lunch if they wait until September to release any new products. If the next iphone doesn't have a bigger screen it's gonna get real ugly considering Samsung and HTC will release new high end handsets in October.
wow.
Apple yet AGAIN beats all records YET it's never ENOUGH for market anal-ysts!
what else does Apple have to prove?!
it's a phoenix like no other.
it's the only tech co. in the Black.
all competitors are flummoxed – not competing with pressure as the analysts state.
Apple's fundamentals are fine.
it is the analysts & institutional investors who manipulate the stock up & down – it has not logic otherwise.
Apple plagued?!
1. SOFTWARE blunders:
who does not have them! Google / MSFT / FB / Yahoo / BB etc have done worse
+ Apple Maps + Siri etc. is constantly being updated!
2. SUPPLY constraints:
it's not all Apple's fault
+ again, who doesn't have such problems
+ Apple has the least such problems as no one mimics its perfected manufacturing/distribution efficiencies + Apple has the most reliable outsourcing partners + do any of the competitors order in the vast numbers that Apple handles?! no! If anything Android is manufactured by a plethora of sources but chaotically updates OS + Apple still sold products in record numbers – what else do you schmucks expect – magic?!
3. EXEC shakeups: so what?
Apple gets rid of weaknesses and that's bad? analysts bitched about these execs & when Apple cleans up they still complain?!
+ Apple still has the strongest team
+ Apple's management is so high in quality you can't just hire any replacement but meanwhile it stands tall & works efficiently no matter what, it's not going to crumble
4. mounting COMPETITION:
really? what competition? it's flummoxed. it's chaotic. it's random. it's in the Red, not black. they never show numbers like Apple at Quarterly Earnings: where are the numbers for Amazon Kindle / Android etc?! they do not publish them. and MSFT & the rest, if they mention anything, cheat by stating distributed not sold numbers.
5. lack of new "WOW" product:
omg! how stupid can analysts be. a. Apple is still the most innovative b. who invents like Apple, really: show me the money, show me who innovated what besides silly gadgetry & coloring by Samsung? where's the real inventions, outside of Apple?
+ why complain about Apple's inventions, if they actually invented or reinvented something and then spend 2-3 years perfecting it for us real life users who only benefit from the efficiency & ease of use ubiquity?! whereas competitors not only do not start from scratch but patch old baggage & add superficial innovations that make overall user experience frustrating, crash-prone, virus-compatible?!
+ we don't mind if anyone but Apple sues for idea infringements & immediately jump to conclusions that Apple sues and no longer innovates?! how immature are we all?! is there any real journalism & realistic analysis left?!
+ patience!! Apple is working on Next Wow-Factor! if not for 3 year cycle, shit will be invented or at least immature tech!
it's sickening how everyone behaves: show me another co. that invents/innovates as frequently! or that invented anything that was life/culture-changing!! Apple influenced 7 industries already – have the competitors even done so once?! at most they keep copying Apple – so why break Apple at every possible chance you have, if it's the only example us Americans can be proud of, to export?! are we that self-destructive or neurotic?
6. AAPL P/E is still the lowest in the tech world – how the hell is Amazon worth 10x more for example?!
7. ANALYSTS:
plus look at the analysts: bloggers have been historically more accurate than the pros!! analysts always misunderstand AAPL, so why do they not stfu. why does the market allow them so voice their silly opinions?! how can they keep their high-paying jobs for such lousy precision? how can the democratic government legally accept institutional stock manipulation?