November 15, 2013
October 28, 2013
Update: The analysts were right to be optimistic, but not optimistic enough
As we wait for Apple to announce its Q4 results in this afternoon’s earnings call, more than half of the analysts included in Fortune’s survey expect the company to beat its high-end guidance of $37B. The average is driven up by the amateurs, who come in at $37.38B, while the professionals expect just a touch under the top end at $36.95B.
Predictions on both revenues and earnings do vary markedly, however. While the consensus view is that year-on-year revenues will be up 3 percent and earnings down 6 percent, even among the professionals the earnings estimates span a 15 percent range.
Top: FBN’s Shelby Seyrafi: $39.18 billion (up 9% year over year)
Bottom: Cantor Fitzgerald’s Brian White: $34.57 billion (down 4%)
Apple beating its own guidance wouldn’t have been remarkable in the days when Apple gave absurdly pessimistic guidance and then blew it away, but would be impressive since Cook started offering realistic ranges … expand full story
October 23, 2013
October 16, 2013
October 2, 2013
September 23, 2013
AAPL quickly climbed 6 percent in pre-market trading following Apple’s announcement that it had sold a record 9M iphones in the first weekend, beating most analyst expectations. The last time it hit $500 was six weeks ago, when Carl Icahn announced his increased stake in the company, believed to be in excess of $1.5B.
Analyst forecasts for sales of the new iPhones had ranged wildly from 5M to 10M, but 9M was at the high end of what most were expecting and substantially above the more pessimistic forecasts. Four major financial firms had seemed unimpressed by the announcement on 10th September, downgrading the stock.
September 11, 2013
September 9, 2013
August 14, 2013
Following comments from billionaire investor Carl Icahn that he had taken a “large position” in Apple and discussed a larger buyback with Apple CEO Tim Cook, Apple’s stock experienced a new six-month high of over $488 per share. Today, AAPL continues to climb and has passed the $500 mark for the first time in nearly eight months since January 23rd.
In an interview with The Wall Street Journal yesterday, Icahn noted that he expects Apple shares will soon rise above $600 and explained his proposal for increasing the stock buyback:
“This is a no-brainer to go buy stock in a company that can go borrow” at a low rate, Mr. Icahn said in an interview. “Buy the company here and even without earnings growth, we think it ought to be worth $625,” he said, referring to the stock price, which closed Tuesday at $489.57, having risen 5% on the news of Mr. Icahn’s investment.
Mr. Icahn’s thesis rests on Apple borrowing at about a 3% interest rate and buying back shares right now, likely at around $525 a piece. A stock buyback can increase earnings per share by reducing the number of shares outstanding.
While Icahn didn’t provide any financial details, WSJ adds that sources say his stake in Apple is now worth over $1.5 billion. expand full story
August 13, 2013
August 5, 2013
July 25, 2013
Fortune reports that Apple’s stock repurchase scheme – buying back some of its own shares – is proceeding more than three times faster than scheduled.
The company was scheduled to repurchase 10 million shares in Q3. It bought 36 million […] By my calculation, the company spent $16 billion last quarter ($4 billion in cash, $12 billion through the so-called accelerated share repurchase program) to purchase 36 million of its own shares at an average price of just over $444.
If Fortune‘s numbers are correct, then Apple has already spent almost all of the $17B it borrowed back in April. Accelerating the planned repurchase program makes sense if you expect the stock to cost less now than it will later. In other words, if you’re expecting the stock price to climb … expand full story
July 23, 2013
The executive summary is that the analysts are pessimistic, though in line with Apple’s guidance.
Earnings [per share] estimates are down across the board — anywhere from -7% year over year (according to independent Patrick Smellie from the Braeburn Group) to -29% (Susquehanna’s Chris Caso) … expand full story
June 24, 2013
April 26, 2013
Washington Post columnist Allan Sloan observes that Apple’s plan to buy back $60b of its own stock will reduce the company’s tax bill by more than the cost of the loans it will take out to fund the share repurchase program.
If you’re wondering why a company with a cash balance of $145b would need to borrow $60b, it’s all about tax … expand full story
April 24, 2013
An insightful Reuters blog by financial journalist Felix Salmon suggests that Apple’s surprisingly low share price may be due to the evolving nature of the company leaving it between two sets of investors.
Conservative investors, who like slow-growing stocks with high dividends, are constitutionally uncomfortable with the volatility inherent in the tech world. And technology investors, who are happy taking that kind of risk, want to see substantial growth. Apple, notwithstanding the fact that it’s one of the most valuable companies in the world, is falling through the capital-markets cracks.
Apple always used to be the company which surprised and delighted investors and customers alike. Its guidance to investors was deliberately pessimistic, blowing through those figures when it reported actual revenue and earnings. It was notoriously secretive about new products, launching new ones in a playful manner with Steve Jobs’ famous ‘One more thing‘ moments… expand full story
April 23, 2013
At 4.30pm Eastern, Apple will report its Q2 results (and we’ll be covering it live). It’s the day when the last three months of analyst predictions and forecasts come home to roost.
Apple’s newly-realistic guidance revenue is $41b to $43b, with margins of 37.5 – 38.5 percent. These numbers would suggest earnings per share of just over $10 … expand full story
April 18, 2013
Predictably, AAPL’s brief dip below $400 yesterday is resulting in a lot of excited reporting in the press, but how much does it all really mean?
The 5.5 percent slide yesterday was a combination of two factors. First, yesterday was a bad day for the market as a whole, with broad selling across a range of US stock triggered by the government reporting slower growth in hiring than the market had expected (via The Economic Times) … expand full story
April 17, 2013
Update: AAPL has briefly dipped below 400 and continues to trade around that mark.
This morning, Apple’s stock has reached its lowest levels per share since late 2011. Since the beginning of 2012, Apple’s stock has rallied all the way up to over $700 per share, but since the end of the 2012, the stock has gone through a downward spiral. Today, the stock is trading at a little over $400 per share, with a daily low of $400.78. These numbers are in the same territory as late 2011 values per share, the same time when Tim Cook took over as CEO.
Chart of Aug-Oct. 2011 below: