
Apple Q2 Results - css
https://www.apple.com/newsroom/2019/04/apple-reports-second-quarter-results/
======
joobus
> The Company posted quarterly revenue of $58 billion, a decline of 5 percent
> from the year-ago quarter, and quarterly earnings per diluted share of
> $2.46, down 10 percent.

So they are shrinking, not growing.

~~~
ancorevard
Remove China from their numbers, and they are growing.

China's economy is still cratering.

~~~
saagarjha
Removing China for a company that depends strongly on sales in China may not
be a very sound analysis.

~~~
bunnycorn
Where does Apple "depends strongly" in China.

Sure is important for the iPhone, but it's not important for the iPad, Mac and
Services.

~~~
saagarjha
Apple depends strongly on iPhone.

~~~
bunnycorn
After a 30% drop in units sold (Independent data from IDC 1), Apple revenue
was only hit by 5% in revenue 2.

1 [https://www.macrumors.com/2019/04/30/apple-36-million-
iphone...](https://www.macrumors.com/2019/04/30/apple-36-million-iphones-
shipped-q1-2019/)

2 [https://www.apple.com/newsroom/2019/04/apple-reports-
second-...](https://www.apple.com/newsroom/2019/04/apple-reports-second-
quarter-results/)

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gigatexal
They’re fine. But stock buybacks and dividends are a waste. I’d rather that
money (I’m a shareholder with not enough shares to matter but oh well) be used
to purchase companies like a Netflix (too late now of course) or a Disney
(also too late) or making bigger purchases to control more of their supply
chain like buying a Qualcomm or increase the R&D budget by double maybe. 75B
in buybacks just juices the EPS numbers. It’s the exact same BS that IBM has
been doing to keep wall street happy. And it seems very un-Apple. I’d rather
Apple take a more cold stance toward shareholders like Steve did and just act
like the company was constantly in the verge of failing and keep making bigger
bets (having huge piles of cash helps with that and they still do it just I
don’t care about a dividend! Find me the next thing better than an iPhone)

~~~
__blockcipher__
I disagree. Apple is a very capital efficient company and already spends a
tremendous amount on R&D.

Just like the concept of the mythical man-month, the marginal utility of
investing additional money in r&d goes down as r&d spend goes up. Or to put it
a simpler way, Apple is running out of effective avenues to invest their
money.

The correct move in that situation is to return the capital to shareholders,
and stock buybacks are the most tax-efficient way to do so, with the added
benefit that if the stock is undervalued (and Apple's certainly has been in
the last few years relative to free cash flow), then the shareholders get an
"extra" return on top of that.

Don't get me wrong, Apple should absolutely invest in R&D...which they do.
They're not pinching pennies, except in situations like the keyboard fiasco,
not including adapters etc - but that's a separate issue.

Absolutely the worst thing they could do is just go acquiring companies that
don't actually fit with their business model. Remember that it takes human
effort (meaning cognitive expenditure) to run a business, and getting side-
tracked with non-critical businesses is absolutely antithetical to that.
If/when Apple does find a company that has something unique for their
situation, then they do acquire them.

~~~
sytelus
> marginal utility of investing additional money in r&d goes down as r&d spend
> goes up

This would be true if there are no new products with huge potential to
explore. I strongly believe any company's future depends on diversification.
Your old products will eventually start becomming commodity with margin race
to the bottom. Companies like Apple needs to come up with new product line
every two years. To get one new product out, you need to invest in R&D for may
be 10 internally because other 9 won't pan out. For each new product you
eventually got out, most likely half might not show promise longer term to
become big. So you are probably left with 1 big product coming out every 4
years and at the same time your previous big product that is ~12 years old
starting to become low margin commodity. Apple is certainly doing great by
putting out series of new products at predictable schedule but I think this
could easily be twice of current rate given the untapped potential in so many
areas.

~~~
scarface74
They have a much more diversified _profit generating_ portfolio than either
Google or Facebook.

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minimaxir
From the financial statements, revenue from Wearables, Home, and Accessories
was _up 30%_ vs the last year. There wasn't a huge release this quarter (aside
from the AirPods refresh which was at the edge of the March 30th cutoff), so I
wonder why it went up so much.

~~~
Hongwei
I was shocked by how much the Airpods cost, and yet still ended up buying a
pair. Have been absolutely delighted. I guess I wasn't alone!

~~~
akhilcacharya
I still don't understand the appeal, nor how they suddenly became a meme in
2018, two years after they were released!

I own multiple pairs of wireless headphones but the fear of losing 1 headphone
in the Airpod pair terrifies me.

~~~
saagarjha
Keep them in your ears or in the case and the probability that you'll lose
them will be pretty close to zero.

~~~
rconti
The AirPods are the one thing I actually lose (and I've lost a number of
times). But I always manage to find them eventually.

The fact that I can't send a sound to them (somehow) when the case is closed
is moderately insane. All it can tell me is that they were somewhere near my
house when I last used them. That doesn't help me understand where they went
to after I put them back in the case and misplaced the case.

~~~
jdminhbg
This is also my only major complaint (I otherwise love them enough to have
upgraded to the new ones when they were released). I would love for the case
to be able to beep when pinged by Find My iPhone. Presumably there's cost
involved in adding Bluetooth to the case, or adding some kind of communication
from the pods to the case, but if it's in the < $50 range I'd probably be ok
with it.

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FPGAhacker
Share repurchasing of that magnitude doesn't seem like a good sign to me. I am
interpreting that as meaning they could not find anything better to do with
that money. If they were problem free and executing perfectly, maybe that
would make sense. But that's hardly the case.

~~~
kitotik
This is not a new strategy[0] for Apple or in general.

“That is a reduction of 21 percent in shares outstanding since 2013. What’s
that mean? It means all other things being equal, the company’s earnings per
share are 21 percent higher than they would have been had it not done the
buybacks.“

[0] [https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-
mon...](https://www.cnbc.com/2017/05/03/apple-has-been-a-buyback-monster.html)

------
r00fus
AAPL up by 10pts (~5%) afterhours as of this comment timestamp. Is this purely
due to the dividend announcement?

~~~
thtthings
Dividend announcement doesn't make stocks go up. They actually go down by the
amount of dividend.

~~~
robryan
After the dividend record date, before it they do go up by a similar amount to
the dividend of it wasn’t already priced in at all.

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jedberg
Based on the after hours results, it looks like this might push them just over
a market cap of 1 trillion again, which if I'm not mistaken would make them
the only company currently over $1T.

Edit: Apparently MSFT closed at exactly $1T today, so tomorrow shall be
interesting.

~~~
Analemma_
MSFT closed at exactly 1T to two decimal places today, and is up slightly in
after-hours trading, but this would be the first time we’ve had two 1T
companies at the same time.

~~~
bgdnyxbjx
After all these years, it’s still Apple and Microsoft at the top. Crazy.

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mikece
"Apple no longer reports iPhone, iPad, and Mac unit sales numbers..."

Probably because they only care about revenue and profits these days, not
innovation and products. Apple didn't get to where they are by optimizing the
supply chain but by coming up with incredible products that everyone HAD to
have. I bought an iPhone last spring because it was the least-bad option in my
opinion; if the Librem 5 is a flop I don't know what I'll get when my current
phone dies because I will __NOT __buy a phone that unlocks by FaceID.

~~~
ancorevard
Because the number is the wrong metric for measuring the health of their
products and customers. Unfortunately, the financial analysts have been so
intensely focused on unit metrics to the point that they can't seem to grasp
the true reality and condition of the company.

As a result, Apple had to go so far as to: 1) State that their goal is to make
their devices last longer. 2) Stop giving unit numbers.

Still, I anticipate it will take years before financial analysts to
internalize the true nature of this beast.

See: [http://www.asymco.com/2018/09/13/lasts-
longer/](http://www.asymco.com/2018/09/13/lasts-longer/)

~~~
saagarjha
Any company that publicly claimed that their goal was to make devices that
have a _shorter_ lifetime would be raked over the coals, FWIW.

