Tag - Wall Street
The latest episode of The MacNN Podcast attempts to understand Wall Street thinking, which is surely an exercise in madness. Apple had a record (fiscal) Q1, again setting a record for the most profitable quarter from any company ever, but the fact that the growth wasn't as significant against last year's killer Christmas season made Wall Street unhappy, particularly with the guidance that next quarter will see the first-ever iPhone drop in sales from last year's quarter.
Despite missing the analyst consensus targets for both revenue and iPhone sales in Q1, as reported earlier Apple set all-time records in almost all areas of its business; it just didn't grow as much as Wall Street had anticipated, and the news about next quarter is genuinely tough, with a significant year-over-year drop in iPhone sales, the first for the company since it introduced the product nine years ago. Despite the various troubles Apple is dealing with even amidst record revenues, there were several bright spots that got overlooked, including an important milestone in the history of Apple: one billion active devices.
Wall Street analysts are heading into the quarterly results conference call for Apple's fiscal Q1 2016 results with an expectation that the company will once again set an all-time record for quarterly revenues, handily beating last year's $74.6 billion in earnings by a current consensus estimate of $2 billion. A polling of a broader range of analysts by Fortune magazine offers an even more rosy $77.4 billion, but many analysts are concerned that iPhone sales will not top last year's results of 74.5 million units.
As previously mentioned, as far as most analysts are concerned, Apple only makes one product: the iPhone. The stock very clearly rises or falls based on that single metric, despite the fact that the company makes billions every quarter from other products and services -- the iPhone's popularity and staggering growth overshadow these factors, and at the least are seen as a leading indicator of how well Apple will be doing. Two new reports and related comments from analysts say that current speculation on Wall Street about a downturn in iPhone sales in 2016 could be off-base.
Two investment analyst firms, Barclays Capital and UBS, have issued their first predictions on the number of iPhones Apple is likely to sell in its fiscal second quarter, which concludes at the end of March. The firms disagree on the exact number of units, but are within 10 percent of each other, ranging from 54 million to 58 million units. UBS' Evidence Lab is predicting higher numbers, but Wall Street estimates remain conservative.
After falling four percent on Thursday, Apple's stock closed out the week by bouncing back and regaining more than half the drop as Wall Street reacted positively to the company's refutation of the "bending" controversy. Some new questions are being raised about the original video that started the kerfuffle, as careful observation reveals that the video was edited (and the reported noted in the video that his iPhone 6 was already slightly bent before demonstrating the flaw). Investment firms Stifel Nicolaus and BMO Capital Markets have both raised their target prices for AAPL.
There is a tendency among analysts to think of Apple as only "the iPhone maker" and ignore its other products and services, feeling that the fortunes of its most popular and profitable product -- the iPhone -- is the key to the company's overall health, at least in terms of its performance on Wall Street. Barclay's analyst Ben Reitzes told investors in a memo on Thursday that he expects AAPL to stay within a narrow range for the next two years.
Newly-released sales figures of the iPhone on Verizon in the calendar second quarter of 2013 may foretell surprising success for Apple in its core iPhone business, says UBS analyst Maynard Um. The analysis, which relies on Verizon maintaining about the same average of total iPhone sales as it has for the past year and a half, projects that Apple may have sold as many as 34.7 million iPhones between April 1 and June 30 this year, what Apple calls its fiscal third quarter. Wall Street consensus on Apple's Q3 iPhone sales calls for only 26.5 million units sold.
Reports are surfacing that Apple may release a disappointing quarterly earnings report for investors on July 23. The consensus from 35 Wall Street pundits polled exactly matches the revenue from the year-ago quarter at $35.02 billion -- meaning zero revenue growth for the quarter, which is traditionally Apple's slowest. Apple itself said it would earn between $33.5 billion and $35.5 billion for the quarter, which ended on June 30.
Despite moves to buy back shares in itself and the creation of a dividend program, Apple adds money to its enormous cash reserve far faster than it can distribute it -- a problem many companies would like to have, but one that is actually quite thorny for Apple. Wall Street appears to be orchestrating an effort -- or acting on insider information -- to put pressure on the company to make some kind of announcement for a future, additional dispersal of cash to investors. Meanwhile, governments have increased their calls for the "repatriation" of foreign-held profits.
Now AAPL Stock: 93.24 ( -0.95 )
GoPro revenue drops, Karma drone delayed
Action camera maker GoPro announced its first quarter results on Thursday, and the news was largely bad. While unit sell-through of the cameras was close to the year-over-year compare, revenues dropped 49.5 percent from Q1 last year, though was slightly above the company's guidance. Overall, the company lost $107 million in GAAP net income, and margins declined to 32.5 percent from 45.1 percent in the year-ago quarter. The company further announced that it would be delaying its planned Karma drone product until this winter, which will likely further impact next quarter's results. The upside of the delay, said GoPro Founder and CEO Nicholas Woodman, is that the Karma will now benefit from debuting just before the holiday buying season. http://bit.ly/1OgpdgD
Netflix iOS app now offers cell-data controls
In a new update to its iOS app on Thursday, subscription entertainment service Netflix has introduced new user controls for streaming over cellular networks to prevent overages, throttling, or other usage issues caused by the high data rate of streamed HD video. Users can choose from a given amount of streaming video that "costs" 1GB of cellular data, which lowers video quality to allow as much as four hours of video per GB (the "automatic" setting provides three hours, while higher quality settings reduce the time to two hours, or one hour at the best setting). In addition, the updated app now offers more 3D Touch options from the app icon, beyond the "peek and pop" previews for video. http://apple.co/24AD1vR
Bentley launches app for Apple Watch
Carmaker Bentley now offers an Apple Watch app for its Bentayga SUV -- a vehicle with a starting price of $229,000 -- that offers some advanced automotive functions not previously seen in other car apps for Apple's wearable. The app allows Watch wearers to control various seat adjustments, environmental controls (including seat massage), and the entertainment system. In addition, various vehicle stats are available at a glance, including distance traveled and vehicle speed. The app is available free on the App Store. http://apple.co/24AyXvs
Lunch with Cook auction nets $515K
The Charitybuzz auction that offered lunch with Apple CEO Tim Cook at Apple HQ and a pair of passes to a future Apple event (winner's pick) has ended with a high bid of $515,000, the highest amount the annual auction has fetched since 2013. Proceeds of the auction will benefit Cook's preferred charity, the Robert F. Kennedy Human Rights organization, where Cook was recently named to the board of directors. The winner, who was unnamed, will be responsible for their own transportation and accommodation, and Cook has up to a year to schedule the meeting -- making it possible that the winner will be among the first to dine with Cook in the new Campus 2 cafeteria, which is set to open along with the rest of the new facility early next year. http://bit.ly/236Wf9N
Free Windows 10 upgrade program ends July 29
Ending speculation, Microsoft has officially announced that it will end free Windows 10 upgrades on July 29, the one-year anniversary of the rollout of the OS. Following the 29th, Microsoft's ubiquitous OS will retail for $119 and up. http://bit.ly/1O0a7kA
US tech giants to candidates: support TPP
Tech giants including Apple, Facebook, Amazon and Uber are among thirteen major US corporations who have written an open letter to Donald Trump and Hillary Clinton urging them to support the Trans-Pacific Partnership (TPP) deal, reports Reuters. Although not yet made public, the letter also asks the candidates to make it easier for the companies to hire tech workers from overseas. Both are not happy with the TPP deal, although Trump is sterner in his opposition to any kind of trade deals between countries. Trump has not rejected outright the idea of importing high-tech talent from overseas, while Clinton has already voiced her support for the idea. http://reut.rs/1Wb0Zwq
Apple mandates June 1 app IPv6 support
Apple has set the deadline for IPv6 support for App Store-supplied software. On June 1, apps thast use a custom networking stack and that are submitted to the app store must support IPv6-only networks. The rule, announced last year as coming soon, will only affect a small portion of submitted applications that do not use the NSURLSession and CFNetwork APIs. http://apple.co/24yBTIY