UPDATE 2: July 23
- Press release – Earnings release
- SEC quarterly results filing Form 8-K
- Conference call replay – Webcast
Share price (WSJ) –In after hours trading they ended up about 44c down (0.5%) at $94.28 Today in mid morning trade they are up by around 2.5% at $97.10 ish. We wonder when the magic $100 will be breached – probably before the end of next month!
- Conference call transcript – Nasdaq (courtesy of Seeking Alpha)
Instant analyst opinions/headlines:
- Bloomberg – Hints new products near with bigger iPhones looming
- Financial Times – R & D spike hints at new products
- Reuters – Revenue lags streets view despite strong China growth
- Wall Street Journal -iPhone Roars and iPad Whimpers
Our view – Apple still not returning to growth but acquisitions and alliances to the fore
With their revenue guidance of $37 – $40 billion for the three months to September it looks as if revenues on a moving annual total basis will by & large continue to flatline for the 7th successive quarter starting way back in Q2 (March) of 2013. They will have been (billions) $169.1, $169.4, $170.9, $174.0, $176.1, $178.2 and $179.2 (using the mid point of their guidance of $38.5 for Q4 2014).
This period of consolidation has been accompanied by a complete lack of new product range announcements. The last one we would consider to have taken place was the iPad way back in 2010. Prior to this the iPhone first appeared in 2007 and the iPod way back in 2001.
Some think that in addition to new iPhone and TV product announcements this quarter perhaps the iWatch or iTime will be announced for this upcoming holiday season. Some say it could generate volume sales of 30 – 60 million per annum in the first year. We shall see.
What has happened in the last quarter of note is;
- The acquisition of Beats
- The announcement of the partnership with IBM in the enterprise market
In the conference call we noticed a few interesting comments re the Apple ecosystem and these developments from Tim Cook:
- “Beats provides Apple with a fantastic subscription music service, access to rare talent and a fast growing line up of products that we can build upon.”
- “In fact for the first nine months of this fiscal year, the line item that we call iTunes software and services has been the fastest growing part of our business. iTunes billings grew 25% year-over-year in the June quarter and reached an all-time quarterly high, thanks to the very strong results from the App Store. We’re continuing to invest in our incredible ecosystem, which is a huge asset for Apple and a very important differentiator of our customer experience.”
- “Yes, we didn’t talk about how the business model (IBM- Apple) is going to work. But generally speaking, I think that each of us have revenue streams in the enterprise and each of us went from having those revenue streams. So that’s how I look at that. And we win if we can drive that penetration number I spoke about from 20% to 60%. That would be incredibly exciting here. The walls would shake. And so that’s what I hope for.”
UPDATE 1: 9.45pm BST July 22
- Q3 Revenues / eps $37.43bn / $1.28
- Unit sales millions – iPhones 35.2 iPads 13.3 Macs 4.4 iPods 2.9
- Guidance Q4 Revenues / eps $37 -$40bn $1.20 (ish)
- Closing share price $94.72 Current price (WSJ) Initial after hours reaction down about 50c
- We have updated our graph & results schedule below.
- More tomorrow but looks like overall performance particularly Q4 guidance is a bit below market expectations.
Apple results, for their Q3 2014 (13 weeks ending June 28) should be released around 9.30 pm BST followed fairly rapidly by their Conference Call at 10pm BST (2pm PDT) which you can listen to live.The, sort of, headline figures to look out for we think are:
- If their revenues are less than $39bn this quarter the growth rate will for the 5th consecutive quarter on a moving annual total basis show an increase of less than 2%!
- Quarter 3 results consensus (Professionals/The Street) Revenues / Earnings per share – $38.0bn / $1.23
- Quarter 4 mid guidance consensus Revenues / Earnings per share – $40.5bn / $1.34
Whilst no new product announcements will be made many think that a new larger iPhone in Q4 and possibly an iWatch are on the cards but still no sign of an Apple TV.
The source of much of our information is Philip Elmer-Dewitt editor of Apple 2.0 to whom we, and likely many others are indebted. Our normal graphic uses his info for the Professionals and Amateurs figures and the mid guidance information from Apple. We also add our guesses. We’re going for a rounded and aggressively high set of results this time!
We will report back later after the results are released . Usually the Q & A session adds value. We shall see, or rather hear, if this continues to be the case and report back tomorrow.
Our header courtesy of Apple is from their Investor News page – impressive!