Apple’s ‘disappointing’ 4th quarter
Apple had recently announced its 4th quarter 2012 earnings report. Despite posting a record $13.1 billion in profit, Apple’s stock has dropped significantly from its all-time high of around $700. I’m posting a few articles that puts their “disappointing” quarter into some perspective:
The $13.1 billion in profit Apple posted for the first quarter of 2013 is the most profitable quarter for a tech company in history, just edging out the record $13.06 billion set in the first quarter of 2013 — also by Apple.
A comparison of Apple’s record quarter to those of the other most profitable companies in the United States shows Apple head and shoulders above its American peers. Apple’s $13.1 billion in profit is 31 percent more than the $10 billion of its closest competitor, oil giant ExxonMobil, which briefly surpassed Apple in market cap following investors’ negative reactions to the most recent quarter.
Apple’s record profits contrasted with Amazon’s hopes to turn a profit:
Apple’s profits for fiscal 2012 reached above $40 billion, making it the only tech company to ever reach that benchmark. In fact, it’s a feat only ever matched by oil giant Exxon Mobil.
A report by Bloomberg writer Mark Gimein contrasted the two companies, noting that while Apple reported quarterly earnings of $13.5 billion this winter, Amazon has only reported a total of $5 billion in earnings spanning from 2003, the first year it turned a profit, through the end of 2011, the full last year it has reported earnings.
In the previous quarter, Amazon actually lost $274 million, but Gimein states the company is “expected to turn a profit” for 2012.
“By conventional metrics,” Gimein writes, “Amazon’s earning are so low that it’s almost senseless to talk about them.”
Comparing Bezos’s fortune to Amazon’s earnings highlights how deeply puzzling that increase has been. Since 2003, the first year in which Amazon earned a profit, through the end of 2011, Amazon has reported a total of $5 billion in earnings. Amazon has not yet reported results for this year; it lost money in the last quarter, but is expected to turn a profit for the year.
Think of it this way: if Bezos had started the company himself, still owned all of it, and had taken out every penny in profit, his bank balance would be less than one-quarter of what his shares are worth. Or think of it another way: Apple’s profit for the last quarter alone is well over twice Amazon’s profit over its entire entire existence.
While pundits have taken it upon themselves to explain that investors were “disappointed” with Apple after it delivered its results last week, evidence points to “a premeditated flash dump” enable by high frequency trading algorithms.
A variety of financial bloggers have offered an alternative explanation for Apple’s decline, suggesting that investors collectively believe the company has run out of growth prospects. They point to the company’s ostensibly flat quarterly earnings, as reported in comparison to the quarterly income statements from last year.
“On a weekly basis,” Leitao wrote, “Apple’s revenue was $4.2 billion in the recent December quarter versus $3.3 billion in the prior-year period. On an equal week basis, revenue in the quarter rose 26.7%.”
The Mysterious Case of Apple’s Missing Growth