Tuesday, October 30, 2012

Analysts Disappointed in Apple’s $8.2 Billion Q4 2012 Profit

Analysts Disappointed in Apple’s $8.2 Billion Q4 2012 Profit, article.
Apple has reported record profits for nearly all of its products for its fourth quarter 2012 time period. With revenues of $36 billion and net profits of $8.2 billion ($8.67 per diluted share), the company’s profits are up 23.9 percent compared to the year-ago quarter.

Profits are up 24%, and they are disappointed... In other words, the world is insane, and the stock market more so.


Stephen A said...

Actually, that's the problem. Apple is presently being run by folks determined to chase this quarter's profit.
The problem is that Apple as it is currently constituted it built around exponential growth and insane margins based on a very small product line. If margins and growth return to industry norms, Apple implodes in a very messy way.
Take a look at the present ASP figures and take another look at the nature of Apple's market. And remember that Samsung is selling 2 phones for every one Apple sells.
Apple is trapped smack dab in a low end disruption situation. They are no longer the only game in town, and with the last 2 rollouts they have pretty much coasted while their competitors are going full steam and pricing products with razor thin margins.
If Apple can't regularly churn out game changing products their margins and growth drop to industry norms. At that point, going it alone on hardware and software is inordinately expensive in comparison with the pooled R&D of the Android companies. In addition, as market share drops, the 30% cut they take on content is no longer viable. This leads to a vicious cycle.
Of course, this could turn around if they end up with a second Steve Job, but I sincerely doubt this can happen. After his return Steve Jobs rebuilt Apple around himself and fired anybody who could possibly succeed him. I'd argue that Apple is a corporation of minions with no master.

Eolake Stobblehouse said...

I hear you.

It'll be interesting to see.