Apple shares head south as iPhone weakness leads Q1 results miss

Lobro78

Apple (NASDAQ:AAPL) fell more than 4% in extended-hours trading on Thursday after the tech giant posted first-quarter results that were worse-than-expected, due in part to "significant supply constraints."

For the period ending December 31, Apple (AAPL) earned $1.88 per share on revenue of $117.15B, as the iPhone accounted for $65.78B in sales. However, Apple's (AAPL) earnings and sales fell short of analysts projections for a profit of $1.95 per share on $121.65B in revenue.

In November, Apple (AAPL) warned that the iPhone 14 Pro would be supply constrained due to the COVID-19 pandemic and its drastic impact on China.

Also seeing weakness during the period were the company's Mac and Wearables businesses, as both accounted for $7.74B and $13.48B in sales.

However, Apple's (AAPL) iPad business generated $9.4B in revenue, topping analyst estimates. Also topping analyst's forecasts was Apple's (AAPL) Services business, which accounted for $20.77B in revenue during the period.

In a statement, CEO Tim Cook acknowledged the difficult environment, but added that the company remains "focused on the long term and are leading with our values in everything we do."

Cook also noted that Cupertino, California-based Apple (AAPL) has surpassed more than 2B active devices as part of its installed base.

Apple (AAPL) will hold a conference call at 5 p.m. EST to discuss the results.

On Thursday, Colorado Senator Michael Bennet wrote a letter to Apple (AAPL) CEO Tim Cook and Google (GOOG) (GOOGL) CEO Sundar Pichai, asking the two tech chieftains to ban ByteDance's (BDNCE) popular TikTok app from their respective app stores.

Comments

[rockjcp]

Looking forward to serious improvement in March quarter!

[SEC Investigator2]

These are the trades that take Apple down everyday in AH's trading. Yesterday over 20 million shares were traded and of them about 100,000 were on exchange the rest all off exchange. The off exchange short trades took down Apple last night only to cash in during today's trading. Think about how much these thieves made today.

www.nasdaq.com/...

[SEC Investigator2]

No one is paying attention to the SP as no one here owns Apple stock anyway. Read all my prior posts regarding yearly fair value. You will see I have written probably 50x that Apple's fair value for 2021 was $154.50. Closed today exactly at $154.50. Still grossly undervalued under Cook.

[All*AAPL]

@SEC Investigator2 said:
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"Read all my prior posts regarding yearly fair value."
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**Read all your *prior* posts?

It's punishment enough just to read your *current *posts.

[SEC Investigator2]

@All*AAPL You need to toughen up son...nobody on this Apple feed has been more accurate than me, nobody not even close. From failed leadership to stock/option manipulation.

[All*AAPL]

@SEC Investigator2 said:
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"@All*AAPL You need to toughen up son...nobody on this Apple feed has been more accurate than me, nobody not even close. From failed leadership to stock/option manipulation."
--
**Nobody has been more accurate that you? Damn! So now you're doing comedy, too? You're every bit as talented as TFG...which is to say, not at all. 😂

[combatcorpsmanVN]

Cell phones have become a Fashion statement along with the necessity of having Cell phone in the first place. So, like driving a Ferrari, a Porsche, or an overpriced EV. Practicality with 'super cars' is nonexistent. I don't think you can drive a 200 mph rocket anywhere in any metropolitan area -- so, you blow $350,000. or more pretending that you're Mario Andreadi (sp).

And, the 'sweet young things' are impressed by an overweight, bald guy, pretending to the a celebrity.

So, the newest Cell phone, tethered to your wrist and shown as often as possible at the Cocktail party seems to placate the closet narcissists. And, that's fine.

[DomL]

people waking up, you don’t need a new phone every year. Its the same thing different name

[Seeking more alpha than you]

@DomL over 65 billion worth of phones were sold.

[Valuestocks007]

@DomL I did go in to upgrade my son's phone .. Iphone 12.. the T store said just wait until the next one.. it was so nice of the lady to say that.

[heywally]

Have Apple products and like them, with reservations. As far as the values that Tim mentions, it’s hard to really have those when you’re so leveraged to China.

[SouthEastAsia]

The Apple fan boys are a bit disappointed in this quarters financial report. Maybe they will finally realize that Apple is a cult and their overpriced phones are not really worth it.

[milehr]

@SouthEastAsia Envy much?

[5893291]

Part 1...
Don't get me wrong..I am huge fan of Apples products and owe them all. However, when Tim says...."focused on the long term and are leading with our values in everything we do".. that is not right by a long shot. That a boy Tim. Apple bought back $405 billion in buy backs in last 5 years and $100 billion in 2022 alone. $400 Billion!!! Remember that all that money for buy backs comes straight from cash. Guess where the cash comes from...us.... buying products and services. Do we want to cheer Apple on for overcharging $100's of billions on products and services... so execs and institutions can then spend it all on themselves? Over 5 years there has been no changes in long term debt, cap ex., or dividends. These are the areas of the company you want to see reducing (debt) and growing. Zilch! This is called short term thinking...not long term and what the heck does "values in everything" mean?

[Seeking more alpha than you]

@5893291 "do we want to cheer Apple on for overcharging 100's of billions on products and services." Yes. That is something I definitely cheer. I hope they continue to charge as much as they possibly can.

[5893291]

Part 2....
Return on capital....right?....Here is test. Whatever price you bought AAPL at in last 5 years, see if stock has gone up as much or more than the rate of buy backs. That is a difficult equation. Let me know if anyone figures it out? Also, buybacks only matter if its for Executives, hedge funds, endowments, and other institutions (insurance co., etc), who own millions and millions of shares. Tim Cook is at mercy of major shareholders (which he never specifies to who the main shareholders are). and that is far from long term thinking. However, he could stand up for himself too. Remember average corporate exec is around at company for 3 years.

[landon1]

@5893291 that is not true, buy backs make my shares a little more valuable, and I don't have millions and millions of shares. If they did the buy back at attractive prices, that is accretive to all investors.

[Legitimate]

@landon1 as long as the outstanding share count is decreasing YOY and that they’re not using buybacks to offset their share expenditure

[User 31614085]

@landon1 a small change in an already miniscule number means absolutely nothing..

[Amstragram]

Who cares about vulgar numbers … apple is a mythical god. This is not investing, this is cult following

[IdealTrader]

Went up more % in today's trading session than loss % after hours. Not that bad of a hit

[Maverick 2021]

It appears the Covid infections are much more challenging than the China Communist Party wants you to think.....

With over 421 Million people traveling over a 7 - 10 day period, the percentage of infections are being masked by the Chinese Government....

They cannot hide the fact that the returning workforce will be very slow and energy demand is down.....

There will be clarity next week, as on the ground news media will have their own data....

AAPL demand for iPhone down....
SBUX store opening and demand are down...

More information will be forthcoming this coming week.....

[PonziPat]

Do you get the feeling Powell might have had a heads up on big tech earnings ?

[DividendNow]

@PonziPat let me ponder on that…probably

[mizesa]

@PonziPat I am still puzzling over Powell’s dovish tone. Especially since financial conditions have continued to loosen after he threw a tizzy fit about that previously. This time when asked, he blew it all off and said basically that markets will do what they do. I thought cynically at first, that he was only attempting to continue to encourage retail FOMO so that his friends on Wall Street could continue to unload the stocks they bought in October.

However, you have brought up another angle. Perhaps, as you are saying, he already knew earnings would be horrific. By coming out dovish he can divert blame and instead blame tech companies for failing to deliver when stock eventually fall. Interesting thought!

[2MDs]

Good numbers! Nothing to see here.

[MoneyPig]

Product sales seem really important, especially the phone. The 20 billion in service revenue, likely recurring, is nice. :) That's a lot of product. APPL seems a manufacturer, an industrial company, but it doesn't make a phone. Odd company for sure.

[SEC Investigator2]

That had to be one of the worst CC's ever by Cook and his hand puppet Topo Gigio. It appears all call ins were warned not to ask about the AR/VR glasses and any other new product as the entire CC was scripted beforehand.

[Hercules7]

@SEC Investigator2 Cook is washed up

[All*AAPL]

@jackc77 said:
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"@SEC Investigator2 Cook is washed up"
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**Wow...one of SEC Investigator2's comments got 2 likes! Shocker!!

[OldEurope]

@All*AAPL
Nah, it is really only one.
And that is why it is bad style to like own comments, because they will be mistaken for legit likes.

[OneMoreCup]

the #'s aren't that bad, BUT going forward, growth would not be same as 2008-2021...I would not be surprised if Apple ends up focusing on cost cutting vs growth in order to maintain the #'s, but in the process, loses out to competitors as time drags on....China is a BIG WILD CARD....with this WW3 talk, not sure what will happen to all their assets/earnings there in the event China receive similar Russia like treatment for Taiwan unification...(notice I don't use invasion....) Apple is still the best American company, hands down, BUT numbers have to make sense in this higher rate environment along w/ the slow down in growth rates....

[GR Value]

@OneMoreCup Scary but that could be said for most global trade. Parts and services would have to be reshuffled to Asia/India most likely.

[OneMoreCup]

@GR Value nothing scary, just another reality risk imo..all this talk of moving to India and other Asian countries, no, it's a big lie really....India lacks the infrastructure, Vietnam is like a vassal to China, on and on. Just look at the barrels of oil used in these Asian countries, not much compared to China, which also means they do not have the infrastructure to handle China's volume, not even close. Vietnam is like 500-600k barrels a day while India is like 5-6 mil a day (China used that much in 2006)....Back to Apple, China made them hold something like $100 bil within China almost like a security deposit for future "conflicts". Which basically means: all the profits from 2015 forward, is trapped in China, strictly like a book entry...unless that has changed, there is some big risk there. China is very shrewd, if Russia treatment is levied on them, they would simply swap all the foreign investments by decree w/ any locked up $ reserves, forcing these cos to go to their own govt for refunds...what a move...

[khlim115]

Tim Cook's magical touch. The key word is "efficiency" from AI. This is is a mini-bubble forming. Plan to sell any rallies and lock in any profit I can.

[chazz91396]

@khlim115 Guess the current rally isn't enough? I sold out at 149. This price action is a joke with the current environment.

[MoneyPig]

Moving to Florida?

[Hercules7]

Heading south ? To Miami or to Cuba lmao

[MoneyPig]

@jackc77

Same here. :)