Manalagi,
"The company needs to change strategically in a number of ways... including in looking after shareholders," Jeffrey said
I have been posting several times that Apple should realize that they work for shareholders, and we invest to get out money grow. Just making good products is not enough. Even value investors are not providing safety net while the P/E is approaching 7 (taking into account of $ 137B cash). That cash is idle earning 1% interest. The days of secrecy and just promises are over.
TC says about new products that are mind blowing and the pipeline is loaded, and yet he would not even comment on WSJ assertion that Apple cut its orders from suppliers. TC might just be another John Sculley. This is a chart and some analysis that is from article Trader J linked to a couple of post up from here
Q1 2013 & Q1 2012 Weekly Analysis | Q1 2013
| Q1 2012
| YOY Change
| Weekly Revenue
| $4,193.23
| $3,309.5
| +26.70%
| Weekly iPhone Unit Sales
| 3,676.08
| 2,646
| +38.93%
| Weekly iPhone Revenue
| $2,358.46
| $1,710.71
| +37.86%
| Weekly iPad Unit Sales
| 1,758.46
| 1,102.43
| +59.51%
| Weekly iPad Revenue
| $821.08
| $626.36
| +31.09%
| Weekly Mac Unit Sales
| 312.38
| 371.29
| -15.87%
| Weekly Mac Revenue
| $424.54
| $471.29
| -9.92%
| Weekly Operating Cash Flow
| $1,802
| $1,253.86
| +43.72%
| Weekly Net Income
| $1,006
| $933.14
| +7.81%
| Weekly Diluted EPS
| $1.06
| $0.99
| +7.07%
|
When Apple's performance in Q1 is examined on a weekly basis, it becomes clear that business is much better than expected. The company grew sales of both iPads and iPhones at a more than 30% pace in the quarter, and while net income and EPS both grew by less than 8%, operating cash flow soared by over 40%, a testament to Apple's ability to generate cash (while cash flow this quarter was driven by accounts payable, due to seasonality, the same effect was present in Q1 2012, making the comparison valid in our view).
Looking at the chart, I would say that Tim Cook is not only taking care of business at Apple but also working for shareholder value. Growing and taking care of the business is taking care of the shareholder IMO. For some reason, possibly because Apple took the title of the 800 pound gorilla and people like to try to take the favorite down, the press had decided that they would report anything negative about Apple and take any positive news and portray it as a negative. Outside of maybe bringing Steve Jobs back from the grave, I don't think there was anything Cook was going to do that would have satisfied the financial press. Maybe they decided they wanted to try to push him around. They got him to respond to the worker issues in China so they pushed with stories about the supply chain. Tim Cook pushed back in the CC by saying don't believe what you read because even if it is accurate, it never gives the whole story, essentially calling out all the stupidity over the past few weeks that has led to part of the negative opinion about Apple right now.
The press and some investors, I think, don't know what they want. Take for example the iPad Mini. The press loved the form factor but hated the price. I remember lots of articles claiming it will never sell, how can it compete with Google, Samsung and Amazon etc etc etc. The main reason for the price was because Apple did not put out a crappy product that was smaller just to compete on price. Margins would be ok on the Mini, just not what Apple has been used to over the past year. So it is understandable that margins go down, especially with the competition for the lower price end of the market, where there is just not enough wiggle room to try to maintain margins. So now there is all this hand wringing about margins going down for Apple. And how do many in the press respond? Apple needs to put out a lower priced phone to compete with Android in emerging markets. Their solution will make the margin issue worse with the possible cannibalization of Apple's higher margin products. If you really look at things, the main reason why Apple did not have better earnings was that margins contracted. And this was because last year, the iPhone and the iPad kept the same form factor as did most of the Apple products over the holiday season.
My message may be muddled but I hope that Cook keeps Apple going along the same path that he has had it on over the past year. Apple still seems to have a good eye and ear for what the consumer wants which is what is important to me and that will drive revenues and profits which is what will drive the share price. He has probably made some mistakes but who hasn't but he would seem smart enough to learn from them(For example, he didn't put up with the person who took Johnson's place in retail for very long once he realized he had made a mistake). While we all may have ideas about what Apple needs to do, most don't have any idea what Apple is working on and what their constraints are so right now, I will trust Apple to Cook and Ive(sounds like a greeting card).
Just my opinion though.
Good luck out there.
Neal |
