Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Apple 2012 2Q Financial Analysis

|Includes: Apple Inc. (AAPL)

Apple 2012 2Q results have to say are disappointing. Although compared with 2011 2Q revenue has increased by 23% from 28,6 bn.$ to 35 bn.$ but as can be seen from graph below pas few quarters if compared to each other show a decrease. If compared to Q1 revenue has decreased by -5% from 26,8 bn.$ Same is with Net income before depreciation increase by 24% from 7,8 bn.$ to 9,7 bn.$, but has decreased compared to previous quarter by -24% from 12,4 bn.$. And that is no seasonality which could explained decrease in Q1 compared to Q4 and that's a red flag!

Companies sales by geography show source of this decrease. Although sales in US has increased by 3% and sales in Europe has decrease by -6% due to Europe decline, Apple lose of positions in Asia was the main reason. There sales has drooped more then 20%. This fastest growing market in the world was companies main drive in past, but now it seems that Apple is losing in Asia to Samsung. iPhone sales has declined by -28% compared to Q1. It seams that iPhone has reached it peak and iPad increase does not overweight that, so it is possible that we will see sale slowing down or even decreasing in the future unless Apple will come up with something new. Either way Apple will defiantly have a significant market share in coming future. iPod and Mac are slowly perishing as products of the past.

According to Apple share in mobile and tabled marked has increased from 60% to 65% and is better then its main competitors Google Android which has increased only from 19% to 20%. But never the less big battle is projected in the future at this marked between Google and Apple. In general companies results are negative due to visible slowdown or even decrease.

Balance sheet continue to be very strong. Equity level has increased a bit to 69%. High equity and profit decrease in past few quarters leads to visible decline in return on equity, which is drooped to 28%. It is even lower then previous courtiers before "the big jump" in Q4 where it was 35%-40%. So that is bad news for the company. Company paid it first dividends 2,65$/share or 2,5 bn.$ for the company. Dividend payout ratio is ~25% which is a good level. Also Apple will start repurchasing its shares, these expenses will be visible only in next quarter.

No other major changes at the balance sheet. In general companies balance structure is good.

Share value:

Equity / share 111,7 bn.$ 0,937 bn. 119 $/sh.
Market value 648$ +529£ 12,3 years
Year Net income before Depreciation 43,0 bn.$ +45,9 $/sh. 7,1%

Companies share basic value is ~119$ (Δ+9,4%/109$ compared with Q1). Current market price is ~648$ (Δ+6,2%/610$). which shows that market is paying ~529$ more or 12,3 years (11,4 years) of Net income before Depreciation earnings, which shows that companies shares are over evaluated. Share profitability (Share market price/Net income before Depreciation) is 7,1%(7.2%) which is average. Main figures has decreased due to faster increase of share value then its profit and taking into consideration that companies profit show slowdown or even decrease this is not a good news. Company announced that it will pay 2,65$/share/quarter dividend or ~1,6% (1,7%) dividend yield which is a bit low due to high share price. In general companies share is over evaluated.

Analysis source: Apple 2012 2Q financial results

Previous analysis: Apple 2012 1Q financial analysis