Apple or AAPL ...
So, ... we now have Apple's published Quarterly financials.
Some have said that they're "going long", others have said exactly the opposite.
Some of the more favourable responses came as a result of Apple beating Analysts's estimates and 'guidances'.
Well, ... I don't know about you, but I reckon there are 'Analysts', and then there are Analysts.
"You pays your money and you takes your chance", as they say.
Maybe doing one's own homework gets you reasonably close to the mark ....
In the table below I've put 3 Quarterly Income Statements of AAPL, side by side, and looked at several, pertinent (IMO) ratios. There's the Q2 of 12 months ago, the most recent Q1 and the latest, published Q2 :-
So Revenue is definitely up from 12 months ago BUT Net Income is less in dollar terms. Not good when you pull in more Revenue but have less to show for it.
If one looks at the percentage ratios, then Q2 in 2012 was generally better than in 2013. Even the Pretax Return on C.E. was giving shareholders a lot better return.
When we compare the Q1 performance of 2012 with the Q2, 3 months later, things are much the same in percentage terms, indicating that Revenue is being absorbed down the Income Statement at much the same rate in recent times compared to how it was a year or so back.
However, the one area which has, and still is, declining is the Return on Capital Employed, which has gone from 43.2% to its current 33.5%. The reason being the fall off in Pretax Income seeing as Capital Employed has actually increased.
The thing is, IMO, all the percentage ratios are very good in comparison with many other companies out there. I mean, how many companies have an EBITDA ratio of 34.5% and a bottom line Net Profit of 24% ?
So I'd say that Apple has been, and probably still is, a well run company, which is probably where Tim Cook comes in.
However, the problem they are now facing, it seems, is the fall off in top line Revenue, more than likely as a result of a their loss in market share over several of their current product lines.
And maybe that fall off is more severe in terms of the number of units sold, because I've heard several commentaries over the airways that Apple's products may be relatively too expensive, in the current tight economic times, as compared to their main competitors. Although you may be getting greater quality of product from Apple, it seems that customers are only prepared to pay so much for that, and 'the Brand', before they turn to other brands that can give them just about all they actually need from their devices, at less cost.
So if the number of Apple's units sold is falling, AND they may have to lower their prices to compete, then that will adversely affect their Top Line even more.
Apple needs to come up with new and innovative and useful and sought after and reliable and well-priced and ground breaking products if they want to gain greater domination of their market, ... and we all know who was best at making that possible in times gone by .... IMHO. |
