First slump in Apple profit for a decade predicted on back of record sales
Apple shares have plunged below $400 on the back of poll of 48 analysts which indicates that the company is set to announce record sales, but a slump in profits for the first time in 10 years, reports CNET. At the time of writing, Apple’s stock was trading at $390, down over 44 percent from its record high of $702.11 reached some seven months ago. Although Apple is expected to report the strongest second quarter sales in its history, a sharp decline of around 10 percent in gross margins is expected to take the shine of the company’s result.
Change may have come from persuasion by Calpers
[Updated with details, stock grants for BoD] Despite recommending (and obtaining) a "no" vote on a similar measure, Apple has updated its bylaws and now requires executive officers to hold at least three times their annual salary in AAPL stock, reports the Wall Street Journal. The rule adopted by Apple has significant differences from the proposal put forth at Apple's annual shareholder meeting, but embraces the same principle -- that executives (and in this case non-executive directors as well) need to be personally invested in the companies they manage.
Payout does not keep pace with massive revenue
For most companies, a payout of $2.5 billion dollars (working out to $2.65 per share for each of its 935 million outstanding shares) would be manna from heaven, but for Apple the significant dividend being distributed today -- only the second such payment in the last 17 years -- doesn't even begin to match its ability to generate revenue or add to its cash stockpile. Over the course of fiscal 2013, the company will spend an additional $7.5 billion in dividends, but is likely to finish the year -- or indeed, this quarter -- with more than that amount added to its cash balance.
Upcoming wave of insider sales in October feared
Two Facebook insiders have sold massive amounts of shares awarded to them during the highly-anticipated IPO in the last two weeks. Earlier this week, Peter Thiel sold $400 million worth of shares in the company. Adding to that, Facebook co-founder Dustin Moskovitz sold 900,000 shares in the course of the last six consecutive business days.
November lockup expiry cause of some concern
Facebook's stock hit a record low Friday, sinking to just over half the IPO price, as insiders and the first investors in the company became eligible to unload the shares "locked up" by federal trading restrictions since the commencement of sales. Experts said in response to the drop that the value of the stock and company could plummet further if early purchasers and employees saturate the market with their shares of stock as more lockups expire before the end of the year.
Stock reaching further in after-hours trading
Another significant milestone was reached today as Apple's stock (AAPL) closed over $600 for the first time ever, though it has hit that mark in intra-day trading on recent occasions. Investors reacted strongly to the news this morning that the company would begin paying a dividend on stock for the first time since 1995, starting in the July quarter. Hints and finally confirmation of explosive sales of the new iPad also helped push the stock up.
Over $464 in after-hours trading
Apple stock continues its steady rise in light of its stunning Q1 2012 (calendar Q4 2011) results in all three of its major product categories. AAPL pushed past its previous record closing high of $455.12 on Friday to end Monday at $463.97 and a market capitalization of $432.59 billion, the most highly-valued publicly-traded company in the world. The stock is edging even higher in after-hours trading, currently at $464.55 as of 9pm EST.
Up 24 percent in 2011, 44.81 percent Y/Y
Apple stock (AAPL) broke through the $400 barrier for the first time on Friday, closing the market session at $400.50 on Friday and maintaining an over-$400 balance in after-hours trading. The stock had temporarily reached above $400 before -- up to a high of $404.50 -- but Friday was the first time it had closed above $400. The volume on the stock was just under 25 million shares, starting the day at $395 and rising 7.5 points or 1.92 percent.
At current prices, would be worth $383M
Apple's required filing of form 8-K with the SEC, a formal notice to the regulatory body as well as shareholders of major changes within the company, reveals that the board of directors has offered new CEO Tim Cook a strong incentive to stay for the long haul -- an offer of one million shares of "restricted" stock that, if valued by today's stock price, would be worth $383 million, AppleInsider reports. Cook will receive half of the units on his fifth anniversary as CEO, and the other half on his tenth.
Users can merge transactions, hide unused sections
Synium Software, makers of Screenium and Mac Family Tree, have updated their personal financing application, iFinance, to version 3.3 -- a free update to existing iFinance users. The update adds full-screen support in Lion, improved stock folders, support for HBCI, merging of transactions and support for formulas that can be used to enter calculated amounts. The software handles transactions, stock portfolios, budgets and more in a variety of languages and currencies.
Gains metaplots, timelines, GL graphics
Metaview, a stock research and 3D market visualization tool, has been updated to v2.0, adding additional 3D features such as metaplots of volume data and 3D plotting of headlines and historic events. Developer Lyle Andrews has also added a "Dragnet" feature that searches for news stories related to stocks being analyzed, new faster OpenGL graphics and a more streamlined client/server architecture.
Apple shares down
Shares of Apple stock have continued to drop for the past two weeks, ahead of Tuesday's "Let's Rock" iPod event. New Macs on the horizon may lift the stock in the months ahead however. Barron's reports that analysts are warning that the Sept. 9 event may be 'underwhelming', with a new iPod Nano and slightly redesigned iPod touch at a lower price-point. New Macs are not expected for the Sept. 9 event and investors have been unimpressed with the rumored iPod releases.
Apple adds iPhone TAM
With the second big release push underway, Apple's total addressable market will increase by 78-percent from 370 million to 660 million, as it launches in 43 total countries by Friday. Analyst firm Piper Jaffray released a note on Friday claiming the above figures, with research providing a conservative estimate of 4.1 million iPhone units sold during the September quarter. Gene Munster, analyst for Piper Jaffray, maintains a buy rating on Apple stock, showing medium volatility.
Apple's stock increases
Analysts at Pingdom have recently compared the value of Apple's and Microsoft's stocks and noted that over the last five years Apple has seen its stock value grow exponentially. In comparison to its value in 2003, Apple's stock has grown by 1384-percent while competitor Microsoft has seen its stock drop by 2.45 percent over the last five years. These percentages are relative to the starting points the stocks faced five years ago but it is still notable that Microsoft's stock is almost worth the same now as it was five years ago. Apple's stock has seen significant growth and is almost worth 14 times what it was worth five years ago. According to the analyst show how successful Apple has been in putting new products on the market.
Top Muffin iPhone list
Top Muffin has assembled a persistent listing of iPhone availability at Apple stores throughout the country using a statistical tracking system published by Apple. As of this writing, Top Muffin reveals that only 15 stores in the US are completely without iPhone stock, with the rest alleging stock of either the 8GB, 16GB White, and 16GB Black models. The three Manhattan flagship stores – West 14th, 5th Avenue, and SoHo – all show stock of all three models.
Apple's stock down
Despite record setting earnings for the third quarter of 2008, Apple's stock is down sharply in after-hours trading. As of 4:45 PST, shares were hovering at $148.94, down $17.35 or 10.43 percent. Apple posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share for its fiscal 2008 third quarter ended June 28, 2008. In the best June quarter in its history, the company sold almost 2.5 million Macs, or a 41 percent increase from the year-ago quarter and over 11 million iPods.
Fortune: Steve's successor
With concerns about Steve Jobs' health surfacing again after his gaunt appearance at Apple's World Wide Developers Conference earlier this month, Fortune has put together a list of 11 possible successors -- all of them from inside the company. While Apple has said Jobs made a complete recovery from a rare form of pancreatic cancer following surgery in 2004, it hasn’t stopped widespread speculation in the media, and may be impacting Apple’s stock price. So, it’s not surprising that even the old media financial press is asking who could fill Jobs' shoes. At the top of Fortune’s list: Jobs’ right-hand man Tim Cook, Apple's Chief Operating Officer.
AT&T resumes iPhone limit
AT&T is allegedly reversing its position on limiting iPhone sales to one per customer, and returning to the company's former three-per-customer rule after finding sufficient stock of the device to do so. InformationWeek writes that the announcement only comes after one day of restricted sales, but AT&T is supposedly restricting sales of the iPhone to credit and debit card purchases. AT&T would not comment on inventory levels of the device.
AAPL target raised to $195
Research firm Thomas Weisel Partners (TWP) on Monday upgraded Apple stock and set a target price of near its previous trading high, noting that the current price severely discounts the long-term growth potential and that any risk for a near-term earnings shortfall has faded. While most analysts have focused on the impending launch of Apple's "3G iPhone" that runs on AT&T's faster mobile network, analyst Doug Reid said that Apple will continue its longer-term growth through its core Mac business as well as continued roll-out of the iPhone to additional countries.
RBC on iPhone stock levels
As Apple's stock of iPhones grows increasingly thin – an issue that reportedly initially surfaced in the company's New York retail stores – RBC Capital theorizes the shortage to be representative of unanticipated strong post-holiday sales of the device. According to Tech Trader Daily, analyst Mike Abramsky claims that a predicted slowdown should have occurred after the holiday season, but sales remained strong, which leaves Apple short-handed with its allegedly ramped down production scale.
Apple execs net 75 million
Apple's executive team – with the exception of CEO Steve Jobs and General Counsel Daniel Cooperman – were forced to deal with restricted stock units that were due to expire. Phil Shiller, Bertrand Serlet, and Ron Johnson have each converted 250,000 restricted stock options to shares, and each gave up over 113,000 shares to pay for expenses regarding the matter. This was due to a decision of performing a net-share settle, at a cost of $139.53 per share.
Apple's cash reserve
Apple's cash reserve of $18.5 billion could benefit shareholders in a big way moving forward, according to BusinessWeekcolumnist Arik Hesseldahl. The cash amounts to $21 for each share of company stock, and Hesseldahl believes Apple should return some of that money to shareholders in the form of a buyback. "The time to buy back Apple stock is now," he writes. Shares are 40 percent below a historic high, and Wall Street is focusing on concerns that Apple will suffer as the economy slumps.
Yahoo assures investors
Yahoo CEO Jerry Yang today sent a letter to the company's stockholders in an attempt to reassure investors of its stance on the Microsoft deal. Yang claims that Yahoo is positioned to increase its value by around 60-percent by 2010, by emphasizing on its current business model. Citing the company's Panama search marketing system, Right Media buyer/seller meet-up service, and Blue Lithium marketing system, Yahoo is poised to grow its $2 billion in cash reserves to the double-digits by 2009.
Investor urges MS, Yahoo
After an ongoing civilized dispute between the two companies [1|2|3], a major Yahoo investor pleaded with Microsoft to raise its bid of $42 billion in an effort to stay the deal. In addition, the second-largest investor scorned Yahoo's pride, saying that they have few options left for a satisfactory buyout. According to Reuters, Bill Miller, the lead stock-picker for Legg Mason, assessed in a quarterly letter to investors Yahoo's true worth to be $40 per share, $9 more than Microsoft's original bid.
Microsoft responds to YHOO
In response to Yahoo's open rejection of Microsoft's proposed buyout, Microsoft issued a statement countering Yahoo's claim that the offer was undervalued. The software giant said that shareholders on both sides would benefit greatly from the merger, and that a timely transaction would be "in the best interests of all parties". Microsoft also urged investors to consider the positive side of having a combined company, highlighting an "exciting set of solutions for customers," as well as a stronger online front.
Apple, Citigroup Top Picks
Apple stock was subject to slight gains as Citigroup added the Cupertino-based company to it Top Picks Live list, which allowed the computer manufacturer to maintain a Buy rating, with a target of $212 per share. According to AppleInsider, shares of the company have been on a slight rollercoaster ride since its December peak of $199.83, taking a total hit of 37-percent since that time. Citigroup expects Apple's earnings per share will beat consensus by 10 cents, possibly more, for its predicted March quarter.
Jobs' letter to investors
Apple CEO Steve Jobs acknowledged the current instability of the company's stocks, but urged investors to remain confident due to Apple's current and future strengths. In a letter obtained by AppleInsider, Jobs points out that the company has over $18 billion in cash reserves, as well as a lack of debt, and over 200 retail locations. In addition, he mentions that Apple's staff, focused strategy, and new product lines are indicative of having much room to grow.
Apple execs salary in 2007
Apple's executive officers have taken home a considerable sum during 2007, with salaries ranging from $500,000 to $700,000, and stock option grants equaling that of the individual’s base salary. Despite his infamous $1 yearly salary, CEO Steve Jobs still holds the majority of company stock with 5.5 million shares, 5 million of which was a gift from the company in March 2003. Jobs also received a $43.5 million Gulfstream V jet as a bonus for outstanding performance from 1997 to 1999.
Apple shareholders meeting
Apple has officially announced its annual meeting of shareholders, where stockowners will elect the company's Board of Directors and ratify the appointment of KPMG LLP as Apple's independent registered public accounting firm for fiscal year 2008. Also on the agenda are considerations for two shareholder proposals, which are listed below. The meeting is scheduled to take place on March 4th at 10:00 a.m. local time in Building 4 on the company's Cupertino campus.
Apple shares plummet
Apple's shares plummeted in after-hours trading today, nearly $19 per share or just over 12 percent to stand at $136.82 as of 5:35PM ET. Shares had already lost about 3.5 percent during normal trading hours on volume of about 85 million. That means Apple's shares are off more than 30 percent from their 52-week high of $202 reached in late December, 2007. Propelling the earnings decline was Apple's earning forecast. For its second quarter, Apple expects earnings of about 94 cents per share on about $6.8 billion in revenue. Analysts expected earnings of $1.09 per share on revenue of $6.98 billion. This despite the fact that Apple is predicting a 29 percent increase in revenue year-over-year, while last march revenue grew only 21 percent.
Analyst: $600 Apple
Apple's stock price repeatedly rose this week to finally break the $200 mark yesterday in afternoon trading, but one financial analyst expects the Cupertino-based company to reach $600 within 18 months. "There's so much growth to look forward to for the iPhone," said Stephen Coleman, chief investment officer at Daedalus Capital. Coleman said Apple gets roughly 30 percent of iPhone fees charged by carriers, according to Bloomberg, while Wall Street estimates place Apple's slice of the revenues somewhere between 5 percent and 20 percent.
The Google effect
The internet has become a very profitable place to run business, especially since Google's IPO in 2004, when a mass amount of money started flowing through the virtual economy, causing some to coin the term "the Google effect". As Google's stock took off, employees began cashing in options, prompting some to buy luxuries like $15,000 custom bikes, and $650,00 boats. Dispatch.com reports that Mercury News recently unveiled an analysis of company documents filed with the Securities and Exchange Commission reveal that Google generated more than $19 billion from 2004 to 2006, which could have exceeded $50 billion, due to the multiplier effect – every dollar of spending theoretically creates two or three dollars in economic activity.