Apple (AAPL) has cut iPhone 5 component orders for calendar Q1 due to weaker-than-expected demand, sources tell the WSJ; display orders are said to be cut by ~50%. The Nikkeialso claims display orders have been halved, albeit from an elevated level of 65M. The articles back up analyst reports of iPhone production and component order cuts, and raise the question of whether Apple needs a cheaper iPhone and/or one with a larger display to bolster its international share. Suppliers on watch: LPL, CRUS, OVTI, QCOM, BRCM, SWKS, TQNT, AVGO. [View news story]
This is interesting. Wouldn't it be safe to assume that Apple ordered at least 65 million in the Oct - Dec quarter if they set an order in place for 65 million for the next quarter. The consensus is for 45 million iPhones to be sold. If they sold 45 million they would have at least 20 million excess displays. According to this report, they are ordering roughly 32.5 million displays for the next quarter. 32.5 plus 20 = 52.5 million. Furthermore, this is only iP5 displays, and wouldn't be counting other iPhones. If you ask me, something's not adding up.
Apple (AAPL -2.3%) has tumbled below $500 following Nomura's big PT cut. Multi-Fineline's (MFLX -20.3%) warning also might not be going over well. Nomura backs up the WSJ and Nikkei's reports by stating its own checks indicate weaker-than-expected iPhone 5 sales; it now expects 48M sales in FQ1, and 39M in FQ2, but is raising its iPad forecasts. Echoing a recent CLSA note, Nomura thinks Android's Asian dominance has become a problem for Apple. Sterne Agee, meanwhile, believes all is well. [View news story]
It's interesting how this keeps getting reported. WSJ & Nikkei's reports showed that supply orders were cut from a much larger than expected order. The weaker demand part is only an assumption. They haven't done any checks to confirm demand.
Secondly MFLX is a positive for Apple. Orders were up as seen in their revenue. Margins for MFLX are expected to be lower. Wouldn't that mean lower costs for Apple or at least they got a good value?
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
That's simply not true. First of all, the Wkipedia stats show only 2009 so it's hard to see how these numbers have changed over time, but if there really was a correlation between poverty and right to work, why is Virginia so highly ranked. I see more of a correlation in southern states being ranked low than right to work.
Secondly, the poverty level is set federally and is a static number. Arguably, states with a lower cost of living would have a lower poverty line and states with a higher cost of living would have a higher poverty line. So the poverty level automatically favors states with higher costs of living. Using that as a measure is misleading, and still does not show a strong correlation between the two. You're obviously strongly pro union, but you're allowing your ideology to blind your objectivity. Unions have a place, but this law does not end them.
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
I'm not claiming what I said to be a fact, and I think most of what you present is also opinion. Using income without regard to the cost of living is not a good metric for measuring economic success. Consider the link below which uses 4 criteria to rate the best states to make a living including: income, cost of living, taxes and unemployment. Ultimately there is little correlation between right to work and non-right to work states. There are many other economic factors that would have a better correlation to a state's economic well being. As stated before, a right to work bill does not ban unions, and the evidence that it destroys the economies and lives of the states that pass it is just not there.
Buybacks Vs. Dividends: Bottom Line, Get Rid Of That Cash [View article]
Apple is very conservative in its expense for taxes I doubt that it will be more than they accounted for.
I'm sorry if what I'm saying is confusing, but I assure you that I'm not talking in circles. There are three basic elements of accounting: income statement, balance sheet and cash flow. Earnings come from the income statement, and uses accrual accounting rules. Apple expenses an amount for taxes every quarter according to their earnings. They have been upfront that it has been expensed. So unless the amount of taxation is different there will be no change in earnings.
The amount that was expensed on the income statement affects the balance sheet by adding a liability for the taxes. It does not affect their cash until they actually pay the taxes. At which point, the liability would be eliminated and their cash position would be reduced. Net assets (Assets - Liabilities) and the income statement would stay the same since liabilities are being reduced by the same amount as the cash.
If there were a tax holiday (this would also be true of any changes + or - in the tax rate but with an opposite effect), Apple would remove the liability from their balance sheet by crediting their income statement account for taxes. This would increase Net Assets because their cash was not used to reduce the liability. Also, by crediting their income statement, they would have a one-time reduction in their expenses for the quarter thus increasing earnings (income - expenses).
Apple doesn't want to repatriate the profit because it's only a paper expense for now. Once they repatriate the profit, it will become an actual loss, but as for their reported earnings each quarter, paying the tax will have no effect.
Apple Does Not Have $137 Billion In Cash [View article]
Actually, I think the taxes were expensed, but are being held in a liabilities account. So it's reflected in net assets, but the cash balance is the cash balance.
"High above the Alps my Gnome is hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting," tweets Doug Kass. The rumor has led Apple (AAPL +1%) shares to spike higher. Update (2:24 PM):Kass is using the post-rumor spike to sell part of his trading position in Apple. [View news story]
A stock split announcement is unlikely at the shareholders' meeting. Any kind of announcement regarding stock split, buy back or dividend hike will likely not happen until the BOD meeting next month. There's a reason Kass is selling. The media has been priming the stock for a disappointment at the shareholders meeting for a while now.
Apple (AAPL -2.3%) has tumbled below $500 following Nomura's big PT cut. Multi-Fineline's (MFLX -20.3%) warning also might not be going over well. Nomura backs up the WSJ and Nikkei's reports by stating its own checks indicate weaker-than-expected iPhone 5 sales; it now expects 48M sales in FQ1, and 39M in FQ2, but is raising its iPad forecasts. Echoing a recent CLSA note, Nomura thinks Android's Asian dominance has become a problem for Apple. Sterne Agee, meanwhile, believes all is well. [View news story]
I definitely don't think we should deny unfavorable news, and my criticism is not with Seeking Alpha. My point is that although this is an unnamed source, it is perceived to be a supplier check. A demand check would be talking to a cell phone carrier or retail outlet. A supply cut from a large original order is not necessarily a lack of demand. Whether it's WSJ or the actual source, the demand portion is an assumption.
The only news we have had from the demand side directly conflicts with the concept of a supply cut due to weak demand. AT&T, Verizon, analyst inventory availability checks and Apple's recent report on China's opening weekend sales all point to strong demand.
That is why I find it interesting that the lack of demand portion is emphasized in the news more than the supply cut.
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
This bill only takes away the requirement that an employee joins the union upon their employment. In your scenario, an employee that was treated unfairly could always decide to join the union later on. I think the real problems unions face is delivering incremental value for their cost. A union is not free for an employee, and to many they are just another big bureaucracy that is disconnected from it's members. Unions rake in large amounts of money that is funneled to the top just like any corporate organization. A right to work bill makes them work harder for their members.
Also, unions still exist for small companies and not just large corporations. However, IMO they just seem to get in the way in smaller organizations, especially when the ownership/management (they are usually the same in smaller businesses) cares about their employees. I think unions have a place, but it's not to be another fat cat siphoning off of an employee's paycheck.
Look Out Below: Apple's Unit Profits Are Falling [View article]
Using per unit operating income to determine the direction of a company can be misleading. A big portion of operating income is fixed costs. So the more units sold in a quarter will increase the per unit operating income. Considering Apple tends to sell more this time of year plus a new product refresh, could push that figure higher. Also, even if per unit income declines, if overall net income increases, it's still positive for Apple shareholders.
The foundation to arguments like yours and similar articles is that Apple cannot possibly continue to demand a premium price for their products given the competitive landscape. I would argue that Apple is much better positioned to handle margin compression than their competitors. If margins compress (lower prices) but volume increases, Apple's total profit can still increase. They have a relatively small market share except for tablets but they are in a growing market, especially tablets. However, many of the Android device manufacturers are already lowering prices to gain market share. How will they keep their relatively larger market share if Apple lowers prices? They can't cut prices more because they have no margin to compress.
If Apple doesn't lower prices but volume continues to rise, their profit will be even greater. I would wait until Y/Y earnings stagnate or fall before I would become bearish. Looking at Q/Q for Apple has historically been very misleading.
Ford's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in which it sells the same products globally. However, the policy has had mixed success in China, where GM and VW dominate by selling cars that cater to local tastes. One problem is that Ford's cars are expensive, although the company is developing a "Value B" sub-$10,000 compact. Still, Ford's David Schoch worries that the company isn't moving fast enough. [View news story]
I'm not sure where you get that most Republicans want the US auto companies to go out of business. Obviously Republicans want US companies to succeed. Many Republican leaders favored a structured bankruptcy for GM versus a bailout/bankruptcy. In a bankruptcy debt is exchanged for equity and the current shareholders are usually wiped out. The business continues to exist.
What the Democrats did, right or wrong, was to ensure that one particular union kept their pensions, but many other unions that represented thousands of employees were wiped out. I'm not sure that it was any more favorable either way since the money was taken from bond holders in order to fund the Union bailout. Bond holders might seem like a wealthy class, but they also represent retirement accounts of millions of Americans.
Leap Wireless (LEAP +1.9%) edges higher as it begins selling the iPhone (AAPL). Leap's unique offer terms - the 16GB iPhone 4S costs $500, but comes contract-free, and plans go for just $55/month - could make it a testbed for a broader effort by Apple to sell the iPhone with a combo of low subsidies and cheap service plans. With Verizon and perhaps soon AT&T hiking service plan prices for many upgrading users, Apple has more incentive to explore alternative sales approaches. [View news story]
Leap is selling the iPhone for $500 not giving it away for free. The test is whether customers would prefer to pay for the phone outright in order to save on the plan and not be tied to a contract.
Apple Does Not Have $137 Billion In Cash [View article]
If the government repatriates the profits, it will show as income on the income statement and on the balance sheet it will reduce liabilities thus increasing net assets. The cash balance will not be affected since the taxes were never paid using cash or otherwise.
Apple's (AAPL) out and AIG's in at the top of Goldman's VIP list - 50 stocks appearing as top holdings at hedge funds. 117 funds own the insurer, with 80 counting it as a top 10 holding. Apple is a top holding in 67 funds, down from 109 in Q4. Also slipping ahead of Apple is the next putative $1,000 stock, Google. [View news story]
Actually, financial management has more to do with earnings, cash flow and return on investments (equity and assets) I think the only thing you could really fault management with financially is a poor return on cash. They have excelled at the first two.
It's the board of directors responsibility to determine stock splits, dividends and buy backs. Those are all tools to manage the value for investors and have little to do with the running of the company day to day.
Verizon (VZ) states on its Q4 call it activated 6.2M iPhones in Q4, good for 63% of total smartphone activations (up from 46% in Q3, and 56% in the year-ago period). Big Red had previously disclosed it activated 9.8M smartphones in the quarter. CFO Fran Shammo says about half of the iPhone sales involved the iPhone 5 - that remark comes as UBS points to survey data indicating a mix shift towards older and lower-capacity iPhone models. Apple (AAPL) +0.8%. (AT&T smartphone sales) [View news story]
That's a very good report for Apple. I wish VZ would have commented on the mix of tablet sales. They reported very strong tablet sales of over 7 million. If they were 60% Apple, that would be 4.2 million of the higher end cellular iPad or IPad Mini devices.
Apple (AAPL) has cut iPhone 5 component orders for calendar Q1 due to weaker-than-expected demand, sources tell the WSJ; display orders are said to be cut by ~50%. The Nikkei also claims display orders have been halved, albeit from an elevated level of 65M. The articles back up analyst reports of iPhone production and component order cuts, and raise the question of whether Apple needs a cheaper iPhone and/or one with a larger display to bolster its international share. Suppliers on watch: LPL, CRUS, OVTI, QCOM, BRCM, SWKS, TQNT, AVGO. [View news story]
Apple (AAPL -2.3%) has tumbled below $500 following Nomura's big PT cut. Multi-Fineline's (MFLX -20.3%) warning also might not be going over well. Nomura backs up the WSJ and Nikkei's reports by stating its own checks indicate weaker-than-expected iPhone 5 sales; it now expects 48M sales in FQ1, and 39M in FQ2, but is raising its iPad forecasts. Echoing a recent CLSA note, Nomura thinks Android's Asian dominance has become a problem for Apple. Sterne Agee, meanwhile, believes all is well. [View news story]
Secondly MFLX is a positive for Apple. Orders were up as seen in their revenue. Margins for MFLX are expected to be lower. Wouldn't that mean lower costs for Apple or at least they got a good value?
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
Secondly, the poverty level is set federally and is a static number. Arguably, states with a lower cost of living would have a lower poverty line and states with a higher cost of living would have a higher poverty line. So the poverty level automatically favors states with higher costs of living. Using that as a measure is misleading, and still does not show a strong correlation between the two. You're obviously strongly pro union, but you're allowing your ideology to blind your objectivity. Unions have a place, but this law does not end them.
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
http://bit.ly/YXRlAk
Buybacks Vs. Dividends: Bottom Line, Get Rid Of That Cash [View article]
I'm sorry if what I'm saying is confusing, but I assure you that I'm not talking in circles. There are three basic elements of accounting: income statement, balance sheet and cash flow. Earnings come from the income statement, and uses accrual accounting rules. Apple expenses an amount for taxes every quarter according to their earnings. They have been upfront that it has been expensed. So unless the amount of taxation is different there will be no change in earnings.
The amount that was expensed on the income statement affects the balance sheet by adding a liability for the taxes. It does not affect their cash until they actually pay the taxes. At which point, the liability would be eliminated and their cash position would be reduced. Net assets (Assets - Liabilities) and the income statement would stay the same since liabilities are being reduced by the same amount as the cash.
If there were a tax holiday (this would also be true of any changes + or - in the tax rate but with an opposite effect), Apple would remove the liability from their balance sheet by crediting their income statement account for taxes. This would increase Net Assets because their cash was not used to reduce the liability. Also, by crediting their income statement, they would have a one-time reduction in their expenses for the quarter thus increasing earnings (income - expenses).
Apple doesn't want to repatriate the profit because it's only a paper expense for now. Once they repatriate the profit, it will become an actual loss, but as for their reported earnings each quarter, paying the tax will have no effect.
Apple Does Not Have $137 Billion In Cash [View article]
"High above the Alps my Gnome is hearing a rumor that Apple will announce a stock split at tomorrow's shareholder meeting," tweets Doug Kass. The rumor has led Apple (AAPL +1%) shares to spike higher. Update (2:24 PM): Kass is using the post-rumor spike to sell part of his trading position in Apple. [View news story]
Apple (AAPL -2.3%) has tumbled below $500 following Nomura's big PT cut. Multi-Fineline's (MFLX -20.3%) warning also might not be going over well. Nomura backs up the WSJ and Nikkei's reports by stating its own checks indicate weaker-than-expected iPhone 5 sales; it now expects 48M sales in FQ1, and 39M in FQ2, but is raising its iPad forecasts. Echoing a recent CLSA note, Nomura thinks Android's Asian dominance has become a problem for Apple. Sterne Agee, meanwhile, believes all is well. [View news story]
The only news we have had from the demand side directly conflicts with the concept of a supply cut due to weak demand. AT&T, Verizon, analyst inventory availability checks and Apple's recent report on China's opening weekend sales all point to strong demand.
That is why I find it interesting that the lack of demand portion is emphasized in the news more than the supply cut.
A pair of right-to-work bills are officially passed in Michigan to set the stage for new employees at General Motors (GM +0.3%), Ford (F -0.1%), and Chrysler (FIATY.PK) to skip around union fees. While labor groups are still making quite a bit of noise on the issue, the Big Three have been deathly quiet. [View news story]
Also, unions still exist for small companies and not just large corporations. However, IMO they just seem to get in the way in smaller organizations, especially when the ownership/management (they are usually the same in smaller businesses) cares about their employees. I think unions have a place, but it's not to be another fat cat siphoning off of an employee's paycheck.
Look Out Below: Apple's Unit Profits Are Falling [View article]
The foundation to arguments like yours and similar articles is that Apple cannot possibly continue to demand a premium price for their products given the competitive landscape. I would argue that Apple is much better positioned to handle margin compression than their competitors. If margins compress (lower prices) but volume increases, Apple's total profit can still increase. They have a relatively small market share except for tablets but they are in a growing market, especially tablets. However, many of the Android device manufacturers are already lowering prices to gain market share. How will they keep their relatively larger market share if Apple lowers prices? They can't cut prices more because they have no margin to compress.
If Apple doesn't lower prices but volume continues to rise, their profit will be even greater. I would wait until Y/Y earnings stagnate or fall before I would become bearish. Looking at Q/Q for Apple has historically been very misleading.
Ford's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in which it sells the same products globally. However, the policy has had mixed success in China, where GM and VW dominate by selling cars that cater to local tastes. One problem is that Ford's cars are expensive, although the company is developing a "Value B" sub-$10,000 compact. Still, Ford's David Schoch worries that the company isn't moving fast enough. [View news story]
What the Democrats did, right or wrong, was to ensure that one particular union kept their pensions, but many other unions that represented thousands of employees were wiped out. I'm not sure that it was any more favorable either way since the money was taken from bond holders in order to fund the Union bailout. Bond holders might seem like a wealthy class, but they also represent retirement accounts of millions of Americans.
Leap Wireless (LEAP +1.9%) edges higher as it begins selling the iPhone (AAPL). Leap's unique offer terms - the 16GB iPhone 4S costs $500, but comes contract-free, and plans go for just $55/month - could make it a testbed for a broader effort by Apple to sell the iPhone with a combo of low subsidies and cheap service plans. With Verizon and perhaps soon AT&T hiking service plan prices for many upgrading users, Apple has more incentive to explore alternative sales approaches. [View news story]
Apple Does Not Have $137 Billion In Cash [View article]
Apple's (AAPL) out and AIG's in at the top of Goldman's VIP list - 50 stocks appearing as top holdings at hedge funds. 117 funds own the insurer, with 80 counting it as a top 10 holding. Apple is a top holding in 67 funds, down from 109 in Q4. Also slipping ahead of Apple is the next putative $1,000 stock, Google. [View news story]
It's the board of directors responsibility to determine stock splits, dividends and buy backs. Those are all tools to manage the value for investors and have little to do with the running of the company day to day.
Verizon (VZ) states on its Q4 call it activated 6.2M iPhones in Q4, good for 63% of total smartphone activations (up from 46% in Q3, and 56% in the year-ago period). Big Red had previously disclosed it activated 9.8M smartphones in the quarter. CFO Fran Shammo says about half of the iPhone sales involved the iPhone 5 - that remark comes as UBS points to survey data indicating a mix shift towards older and lower-capacity iPhone models. Apple (AAPL) +0.8%. (AT&T smartphone sales) [View news story]