Every so often Apple (AAPL) posts one of those quarters where it seems almost petty to criticize it using normal metrics. Questions are raised, sure, but within the context of this being a real company and thus constrained by physical and practical barriers what the company has done so far transcends other organizations that it becomes impossible to even model the results.
By now you all know. The world’s biggest company recorded an enormous 4th quarter. Revenue beat, driven by absurdly huge iPhone sales of 39.3 million. Expectations were for 38 million but the best part was the average selling price was $602, a huge improvement over last year. iPhones are now responsible for 70% of Apple’s profits.
Mac sales were also great and they took share from PCs.
The only question was in iPads where sales not so shockingly fell to 12.2 million units, down from 14 million last year. Obviously the debut of the iPad Air2 this month took a bite out of those sales and it’s clear Tim Cook is still getting his arms around the replacement cycle for tablets versus phones and macs.
Apple Inc - Earnings Surprise | FindTheBest
The biggest problem in the model as it stands is that Apple is at this point just releasing different form factors for phones and tablets. If it’s not a Mac it’s a device with a touch screen that has cellular and wifi capabilities. Does it really matter whether or not there’s a phone on it? Who takes phone calls?
The stores are also looking pretty stale but that’s a problem for another day.
Apple’s problems, to the extent it has any, are for next year. Clearly it doesn’t have a TV and the screen of the latest Mac makes you wonder if they ever. Obviously the size of the watch market remains to be seen but I’m not sweating that either.
What bulls needed from Apple was justification that buybacks and dividends and all the other stuff Apple has been doing to push up its already buoyant stock was worth the money. After the pig show that was IBM Apple needed to prove that all tech wasn’t reliant on fake EPS.
Mission accomplished.
Apple leaves the quarter with $155.2 billion in cash on hand and net income of $39.5 billion for fiscal 2014, just slightly lower than what it earned in 2012 with a full year of iPhone5 profits.
The stock is pushing back towards $100. Apple had been one on everyone’s “buy the dip” list. Now it looks like we won’t get the chance. Score one for the market bulls.
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