Nasdaq @2398.17, +54.16 (+2.31%)
Tick tock, tick tock, counting down the seconds to this afternoon's opening of the Nasdaq 100.
Why the expectation you ask? Well, following last nights close and a good day in the US due to mostly positive company updates and positive comments from the President regarding the ongoing US debt limit negotiations, Apple managed to sneak out their "modest" 3rd quarter results.
The company's 2nd quarter profits were up by a not insignificant 95% year on year (see earlier post: Apple 2nd quarter update - profits up 95%!), so no pressure there then.
Back to this time around though and in the run-up to yesterdays results, the shares have had a little burst of expectation as analysts began anticipating a positive update.
This is in spite of negative commentary earlier in the year that the company couldn't possibly maintain its pace given competition and supply chain disruptions following the Japanese Tsunami.
Did they disappoint this time around?
Well the "modest" headline grabbers for the 3rd quarter are:
- year on year 3rd quarter sales at $28.57 billion are up 82% (last years 3rd qtr: $15.7 billion)
- 62% International sales. Inc. sales in China which jumped from 4% to 13.3%.
- year on year 3rd quarter profits up by 125% to $7.31 billion (last years 3rd qtr: $3.25 billion)
- quarterly cashflow of $11.1 billion (up 131%)
- Gross margins of 41.7% v 39.1% a year ago
- 20.34 million iPhones sold (up 142%)
- 9.25 million iPads (up 183%)
- 3.95 million Macs (up14%)
- 7.54 million iPods (-20%)
Not sure what you can say about the numbers apart from the fact that the iPhone seems to be cannibalising iPod sales!
At times it also feels like I have some kind of number dyslexia when looking at Apple's results.
Seriously though, looking forward, I just can't imagine what a disappointing set of results might produce and how the company might manage those expectations. Fortunately, at this stage they are predicting quarter 4 to be slightly down on this one with sales in the region of $25 billion but these will coincide with a block-busting set of full year results?
Can the iCloud deliver, will the iPad be the new standard, or is there an exit point somewhere ahead?
The one positive clue is that, until the iPod phenomenon (and iTunes), Apple have traditionally managed profitable niches in their chosen market e.g. Macs and even subsequently with the iPhone.
But, there now seems to be a drive to complete the family network of compatible products which Apple also seems to do best.
With the iPod and iTunes they also took a trick out of the gaming market as killer consoles still need a killer game. Can the iCloud bring it all together and will iTunes continue to be the killer game?
Only time will tell.
But, that quandary aside, I am looking forward to this afternoon's opening and fingers crossed for what could soon be the virtual portfolio's first individual 100% gain! (since I started posting).
Article links:
- www.apple.com: Apple Reports Third Quarter Results
- www.industryleadersmagazine.com: Quarterly Results by Apple: Big Profits from China iPad iPhone Boom
- www.telegraph.co.uk: Apple iPhone and iPad sales soar: analyst reaction
Webcast links:
- http://www.apple.com: Apple Financial Result - Conference Call
Earlier posts:
- Apple 2nd quarter update - profits up 95%!
- Apple update: Ipad 2!
- Is Android a reason to invest in Google?
- Globally Diversified Technology, Growth, and Hedge portfolio!!!
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