360° Coverage : Apple Predicts Flat Revenues, New Product Categories

2 Updates

Apple Predicts Flat Revenues, New Product Categories

Jan 28 2014, 1:00am CST | by

Despite reporting today its highest quarterly revenue – from $54.5 billion a year earlier to $57.6 billion – and operating profit ever, for the last December quarter, Apple stock fell more than 8%....

Filed under: news

 
 
 

38 weeks ago

Apple Predicts Flat Revenues, New Product Categories

Jan 28 2014, 1:00am CST | by

Despite reporting today its highest quarterly revenue – from $54.5 billion a year earlier to $57.6 billion – and operating profit ever, for the last December quarter, Apple stock fell more than 8%. Shares were down $44.50, or 8%, at $506.

So what gives?

“No technology company has ever generated that much revenue in a single quarter,” said Apple CFO Peter Oppenheimer during the earnings call. “And we’re especially pleased to have generated that record despite foreign exchange headwinds, the year over year decline in iPod sales, and the higher revenue deferral rates from iOS devices and Macs that we discussed last quarter.”

Product-wise, this was also a really busy quarter, with Apple rolling out new iPhones, iPads, iMacs, MacBook Pros and Mac Pro.

But, although the company sold a record number of 51 million iPhones during its latest quarter, it fell short of financial analysts’ expectations of 55 million.

While it’s prudent to take the somewhat “speculative” opinion of Wall Street with a grain of salt, this “miss” would have been a drop in the ocean if Apple’s smartphone didn’t account for so much of the company’s bottom and top line – 56% of its revenue and over 70% of its profits.

Which also could help explain why Apple turned in the same net profit of $13.1 billion as a year ago, despite the revenue increase – selling more iPads and Macs, rather than higher-margin iPhones.

With a zero-growth  quarter looming, Apple needs to show it can still innovate

But what really hurt Apple’s stock was the company’s lower guidance for the current quarter, predicting revenues between $42 and $44 billion, with a gross margin between 37 and 38 percent. This is roughly flat compared to the $43.6 billion in revenue and the 37.5 percent margin the company reported in the year-ago quarter.

“Most investors will be disappointed with the forecast, given the recent China Mobile launch,” said Alex Gauna, an analyst at JMP Securities. “The problem is that it’s not a robust second-quarter forecast, so we are back to no year-over-year growth, based on this guidance.”

With this in mind, Apple CEO Tim Cook is under even more pressure to show investors that the company can still innovate.

“Innovation is deeply embedded in everybody here, and there’s still so much of the world that is full of very complex products, etc. We have zero issue coming up with things we want to do that we think we can disrupt in a major way,” said Cook.

During the call, Piper Jaffray analyst Gene Munster asked Cook if Apple still planned to release a new product category in 2014, as the company repeatedly said it would last year. And Cook’s response was, “Yes, absolutely. No change.”

Although, there are a lot of things Cook could talked about, like a larger iPhone or a mobile payment system, the one device that is on top of everyone’s mind is the so-called iWatch – which could be Apple’s first entry into the wearable device category.

And according to a recent study by Deloitte, there will be 10 million wearable electronic devices sold in 2014, generating about $3 billion, and more than 100 million units by 2020. But to be fair, IDC also reported this month that the global smartphone market topped 1 billion shipments for the first time in 2013, with Apple owning 15% of it!

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH3 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

How stress ups depression risk
New York, Oct 21 (IANS) The immune system is crucial to fend off diseases, but if it is hypersensitive to stress, the risk of depression may go up, says new research.
 
 
Male IBS patients report more social stress
Washington, Oct 21 (IANS) Male patients with irritable bowel syndrome (IBS) experience more interpersonal difficulties than their female counterparts, a study found.
 
 
Why people accept inequality
London, Oct 21 (IANS) Inequality can be fair too and the brain knows it, a new research has found.
 
 
Pentagon announces rapid response team for Ebola
Washington, Oct 21 (IANS/EFE) The Pentagon during the weekend announced the formation of a specialized 30-person military rapid response team to combat Ebola in the US.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla