Apple, which reported tearnings that topped analysts' estimates on
better-than-expected iPhone sales, says it expects a "busy fall" with
new products.
"We are laser-focused and working hard on some amazing new products
that we will introduce in the fall and across 2014," Apple CEO Tim
Cook said in a statement. Later, during an hour-long call with
financial analysts, Cook added that "we're working on stuff we're
really proud of," while CFO Peter Oppenheimer said the company is "on
track to have a very busy fall."
Company watchers and investors, who have hammered the stock in the
past 10 months because of the absence of new products, are looking
for Apple to release an update to the iPhone, its top moneymaker, in
September or October. A smartwatch and interactive TV may also be in
the works, as well as an update to the iPad mini tablet.
"Our key catalyst will always be new products and services," said
Cook, who celebrates his second anniversary as CEO next month. "These
will be both in existing categories we're in and in new categories…I
think we have lots of growth opportunities. I don't subscribe to the
common view that the high-end of the smartphone market has hit its
peak."
Investors seemed pleased with the results and the company's
commentary, sending the shares up as much as 5 percent in late
trading.
Apple said today that sales rose to $35.3 billion from $35 billion in
the fiscal third quarter ended in June. Profit was $7.47 a share, down
from $9.32 a year ago. That topped the expectations of analysts, who
were expecting expecting sales of $35.01 billion and profit of $7.32 a
share.
Gross margin, a key measure of profitability, narrowed to 36.9 percent
from 42.8 percent, as analysts expected. Apple had forecast gross
margin of between 36 percent and 37 percent.
For the fourth quarter, which ends in September, Apple said it expects
sales of $34 billion to $37 billion and a gross margin between 36 and
37 percent. Analysts were looking for fourth-quarter revenue of $37.1
billion and a gross margin of 36.9 percent.
"We believe fiscal year 2013 will prove to be a year to forget, but
fiscal year 2014 will prove to be a year of new product innovations,"
said Brian White, an analyst with Topeka Capital Markets.
iPhone Shipments Up, iPad Shipments Down
Apple sold 31.2 million iPhones, up from 26 million in the year ago
quarter, on better-than-anticipated demand for the iPhone 5 and sales
of lower-priced iPhone 4 models to first-time smartphone buyers,
according to Cook. While sales of the iPhone 4 reduced the average
selling price for the iPhone — the ASP was down 4 percent of $27 a
unit in the quarter — that demand did drive a spike in the shipments,
allowing Apple to top analysts expectations. Toni Sacconaghi of
Sanford C. Bernstein was looking for third-quarter iPhone sales of
25.5 million units, while analysts on average were expecting iPhone
shipments of 26.4 million units.
In addition, Apple sold 14.6 million iPads, down from 17 million in
the same period a year ago. Analysts had expected iPad shipments of
17.8 million units. Cook said the decline was due to lower levels of
iPad inventory in the 2013 third quarter versus the 2012 third
quarter.
"Overall we view Apple's June quarter results and September quarter
guidance as largely as expected with better iPhone sales and worse
iPads," Gene Munster of Piper Jaffray said after the results were
announced. "Since we continue to view iPhones as the most important
part of the story, we view the overall report as slightly better than
expected. Nothing about the report itself changes our belief that the
key factors on the stock are the expected cheaper phone in the fall as
well the potential TV announcement late this year and an iWatch in
2014."
Apple shares jumped in late trading after earlier closing down $7.33,
or 1.7 percent, to $418.98 in regular Nasdaq trading as investors
awaited the results. In late trading, they rose as much as 5 percent,
or $20.98, to $439.97, and were up about about 3.3 percent at the
conclusion of the earnings call with Cook and Oppenheimer.
The company hosted a conference call to discuss earnings results.
Here's a play-by-play.
2:00: Apple is starting the call, with opening comments to be made by
CFO Peter Oppenheimer.
He's reading through the sales, earnings and gross margin results.
Channel inventories declined sequentially by $1 billion. Sell through
was $36.3 billion. As such, our June quarter sell through increased by
6 percent year over year.
On to iPhone. 31.2 million shipments were up from 26 million a year
ago. 'iPhone sales were ahead of our expectations." Says sales were
good in the US, UK, Japan (up 66 percent year over year), Brazil,
Russia, India and Thailand. iPhone 5 was the most popular but Apple
was "happy" with sales of iPhone 4 and 4S sales too. Apple exited the
quarter with 11 million iPhones in channel inventory.
iPhone has earned the top spot in customer satisfaction from JD Powers
nine consecutive times, Oppenheimer says.
Enterprise and government customers continue to adopt iPhone.
American Airlines, Cisco, General Electric, Roche and SAP have
deployed more than 25,000 iPhones each across their organization. JPL,
ATF and National Geospatial Agency are supporting "thousands of
iPhones" on their network.
RE: iPad decline in shipments from a year ago, Oppenheimer says the
tough year over year comparison was due to channel inventory. "We
built 1.2 million units of iPad inventory in the June quarter last
year, but reduced it by 700,000 units this quarter. Sell through was
down about 3 percent year over year."
2:08: Number of iPad apps continue to grow, along with custom iPad
apps used by business and government. Novartis, SAP and others have
deployed more than 25,000 each at their companies.
On to Macs. Oppenheimer says sales of 3.8 million units, down from 4
million a year, was better than Apple expected. He says the new Mac
Pro, demonstrated at WWDC in June, is still set to be available in the
US (and made in the US) starting later this year.
OS X Mavericks, the new version of the Mac operating system unveiled
at WWDC in June, is still on track to be available in the fall.
Education sales were up, thanks to sales of 1.1 million iPads as well
as sales of Macs in the June quarter. LA Unified School District made
a $30 million purchase of iPads (as reported June 19).
iTunes revenue now being discussed. Sales of iTunes, software and
services totaled $3.99 billion.
Apple has posted a data sheet that breaks out earnings by products and
geography. You can find it here.
2:15: More than 900,000 apps created for iOS, with 375,000 designed
specifically for iPad.
iOS 7, new version of the mobile operating system, still on track for
fall release.
On to retail stores, 408 stores — 156 outside the U.S. Apple will open
9 new stores this quarter. Four stores were relocated in June quarter
that had outgrown their space. Retail sales were $4.07 billion.
Average store sales were $10.1 million, down from $11.1 million a year
ago.
Cash: Apple now has $146.6 billion in cash, up from $144.7 billion at
the end of the March quarter. $106 billion of that cash is offshore.
Apple spent cash in the third quarter on stock repurchases and
dividend payouts. (They announced an expanded dividend and stock
repurchase program back in April). 9 million shares were retired in
the quarter.
Fourth quarter outlook: Revenue of 34-$37 billion. Gross margin of
36-37 percent, including $90 million related to stock-related
expenses. Operating expenses will be between $3.9 to $3.95 billion.
Tax rate will be 26.5 percent.
2:20: Shares still up about 4.5 percent.
Q&A Begins. First question is about why gross margins don't seem to
reflect the fact that Apple says it will announce new products in the
fall.
"We are on track to have a very busy fall." Oppenheimer says he will
talk more about in October, when Apple announces 4Q results.
Tim Cook now joins the call to answer a question about channel
inventory. Cook says channel inventor for iPad was down 700,000 units
in the third quarter and iPhone inventory was down over 600,000 units.
"We typically don't like to have any more inventory than we need. So
if we can find a way to reduce, we do so."
Cook asked about where new innovation will come from. "Our key
catalyst will always be new products and services…these will be both
in existing categories we're in and in new categories." Apple can also
expand into markets such as enterprise market with iPhone and iPad. "I
think we have lots of growth opportunities. I don't subscribe to the
common view that the high-end of the smartphone market has hit its
peak."
Question about decline of iPad shipments — a 2.4 million unit decline
from a year ago. Cook says 1.9 million units were just due to changes
in channel inventory. We reduced by 700,000 units in the current
quarter. So the underlying sell through declined by 3 percent. If you
look at the situation we were in a year ago quarter, we had just
announced the third-generation iPad…It was not a surprise to us."
iPad accounts for more than 80 percent of Web traffic. "IF there are a
lot of other tablets selling, I don't know what they're being used
for," Cook said. "We feel incredibly good about where we are."
Shares snapshot: $436.79, up $17.80 (4.25%) at 5:27PM EDT.
2:28: Question about gross margin. Oppenheimer says they were
"pleased" with the third quarter results. The sequential decline from
the prior quarter "wasn't a surprise to us." Apple expected lower
sequential revenue going from March to June, and the company expected
a different product mix. Oppenheimer said gross margin "ultimately
ended up within the range we thought it would be and we hit the high
end' of our guidance.
Question about a decline in average selling price of iPhone. The
iPhone ASP was down 4 percent, or $27 as customers bought more
lower-priced iPhone 4.
Cook said that we saw very strong sales in emerging markets — or
prepaid markets. India up 400 percent, Turkey and Poland up over 60
percent, Philippines were up about 140 percent. Apple also said it saw
uptick in demand
Question about sales of China. Cook says that China was weaker in the
quarter. Sell through in China was "only down 4 percent from the year
ago quarter, when you normalize for channel inventory." Hong Kong was
down — not sure why — while mainland China was up 5 percent year over
year. That is a lower growth rate than we've been seeing. He
attributes it to the economy there.
2:34: Question about whether there will be an iPhone trade in program.
Cook says we haven't announced anything related to a trade-in program.
Says there are a number of other places that do trade ins. "The reason
is that it's so attractive around iPhone is the residual value around
iPhone stays so high…it makes the trade-in programs lucrative. But we
haven't announced anything…I'm not opposed to it. I see the channels
doing it and I like the environmental aspect of it."
China: $4.9 billion in sales in the quarter. "We've grown our business
there significantly. In the last 12 months, we've done $27 billion.
It's a huge business for us." Cook says that there are more than half
a million developers in China developing iOS apps. That number is up
70 percent from a year ago.
Shares shapshot: $432.11, up $13.12 (3.13%)at 5:38PM EDT
Cook asked about more affordable pricing and if that speaks only to
iPhone 4 sales. Cook says yes, and that the iPhone 4 is attracting
many first-time smartphone buyers. "It's proving to be a great product
for that buyer." Are there more weapons Apple could use to attract
more iPhone buyers? Cook says there are always more weapons.
Question: Are there new product categories big enough to move the
needle on sales growth? Cook says, "We'll see…We're working on stuff
we're really proud of."
Question about carrier partners. He says that there have been articles
about partnerships in Russia. Apple is selling phones through retail
organizations, as well as through some carrier-owned stores. iPhone
activations in Russia set a record — were the highest ever.
Cook asked about components. He says DRAM pricing has increased and we
see continued upward pressure. NAND pricing is fairly stable and
following seasonal trends. LCD prices have dropped and we expect
further reductions. Other commodities are in a supply-demand balance,
which means pricing will decline.
Cook asked about new products and if Apple is chasing some huge
markets. Cook says that's not how Apple looks at things; they start at
products. "We're focused on great products." Says if we do that really
well, the financial rewards will come. If you don't look at products,
"you can end up creating things that customers don't want."
2:48: Question about iPhone ASPs. Cook again says the company saw good
demand for the lower-cost iPhone 4. He says those sales, coupled with
great demand for iPhone 5 allowed Apple to ship more iPhones than many
expected.
Oppenheimer asked about gross margin forecast for Q4. He says they
expect component costs to be favorable but currency exchange to be
challenging.
Shares at $433.51, up $14.52 (3.47%) at 5:52PM EDT.
Question about iOS being built into car models. "I see it as very
important," Cook said. "It is a part of the ecosystem. Just like the
app store is a key part of the ecosystem and iTunes and all our
content are key and the services we provide from messaging to Siri and
so forth, having something in the automobile is very very important.
It's something people want. I think Apple can do this in a unique
way."
2:55 p.m.That's it. Call ends with shares at $433.05, up $14.06 or
3.36%, at 5:55PM EDT.
Copyright http://www.forbes.com/
Source:http://newsmews.blogspot.com/2013/07/apple-earnings-tops-estimates-on-iphone.html
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These reality show chicks are ballin’. Well…. at least those that are on Real Housewives of Atlanta. They are some of the highest paid reality show stars on television.According to reports, Kenya Moore’s antics during RHOA’s Season 5 has helped her twirl her way right up into RHOA’s season six with a nice pay raise! After holding out on signing a contract for the new season until she was promised some huge bucks to deposit in her bank account, she negotiated a deal that would guarantee her $600,000 for Season 6. Now, that’s a come up!US Weekly is also claiming that Nene Leakes and Kandi Burruss make $800,000 per season, but can make even more money for certain things like when Kim [Zolciak] agreed to take off her wig, and of course spin offs. [Going through a divorce and then remarrying again may have also been worthy of a pay increase.] They also claim that Phaedra Parks and Porsha Stewart make $50,000 per season. That’s a big drop from the $600,000 Kenya will allegedly be making.If these numbers are correct, it’s no wonder everyone is jumping in the reality space, and Nene ain’t having it. Over the weekend, she expressed that reality TV was getting too crowded for her taste when she tweeted:Just saw a list of all the new reality shows that r coming soon! Everybody is a reality star now! WOW! I gotta go. I guess she really will be "Gone With The Wind FABULOUS"
Ironically, her new spin-off, “I Dream Of Nene” is coming soon. She better keep cashing those checks!http://feeds.feedburner.com/TheChroniclesOfEfrem
Did you know there are so many uses for a free standing butcher block other than chopping veggies? It's true!For example, using it to wallpaper bi-fold doors.
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Done!
Next step, paint them. I painted them the same color as the beadboard backsplash I did in my kitchen.
Unfortunately the doors can't go back up yet. Silly me didn't realize that little bit of added thickness now doesn't make the doors close properly. Yet another reason why I'm not a carpenter.I'll need to adjust wood trim so they will. But I'll do it in a few days. I need a break from wrestling with those @#$@% doors again. Besides, I need to order some decorative strap hinges.I did try to paint faux hinges.I have one word to describe the outcome.----> YIKES!
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Snoop Lion on The George Zimmerman verdict:http://youtu.be/K7WOvpKSqPI
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