The Banking and Strategy Initiative

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The Retail Lifestyle Champions: Apple manages to disapppoint with $36 B topline

Most companies with a $28B topline have had a hard enough time trying to make the same $28B next year. All of them would technically qualify as Apple’s competition till yesterday. Apple, however managed to grow toplines a tad above expectations to $36B growing profits under 25% to $8.2B or $8.67 per share from $6.6 last year shaming the best profit making Wall Street Banks with a profit run rate higher than their pre crisis years. The Gross margin of 40% though is under pressure at Apple and already equities are disappointed as Apple issued a warning on its outlook after the profits on the iPhone5 and the iPad mini which is even considered priced beyond the tempering mark of $199 for Android devices for its lower margins.

The Holiday Season last year accrued an EPS of $14 per share but Apple thinks it unlikely it will make more than $11.75 this Christmas. Also its manufacturing costs doubled this quarter’s reporting with Plant and Equipment totting up  $15.5 B Also after a long time Apple’s earnings were below street estimates for the quarter.

The phased out iPods still sold 5 m pieces with international Sales making 60% of Apple’s $36 B topline in the quarter. The number of iPhones sold grew nearly 60% this quarter to 25.9 m units and inventory constrained iPad sales grew 25% to 14 million units . Apple’s imac line which sold nearly 4.9 million units The Holiday season quarter is going to be the first quarter of its next fiscal and will be opening at $52 B in revenues fromthe company’s guidance

iMacs led its retail stores 5% higher sequentially even as it languishes at #3 in China behind Samsung, Lenovo and ZTE in smartphones and has not been able to break materially into the market in India. iPads and iMacs together account for a substantial share of marekt in the PC category as well. Apparently cash inching up to $124.8B has nothing to do with Apple’s next investments either as it continues to try an ddevelop the Cloud as a market even as iPad sales fell20% sequentially in the quarter. It sold 5 m iPhones on the launch weekend. Amazon also broke down sympathetically in the bourses for a change as Apple noted its need to be cautious ahead of the Holiday season. amazon posted a net loss for the current quarter.




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This entry was posted on October 25, 2012 by in Financial Markets and tagged , , , , , , , .


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