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Apple would've grown in 'vast majority' of markets if not for FX headwinds: Cook

Feb. 02, 2023 5:31 PM ETApple Inc. (AAPL)By: Chris Ciaccia, SA News Editor58 Comments

Apple Store At Catalonia Square (Plaza Catalunya) in Barcelona in a neoclassic architecture building


Apple (NASDAQ:AAPL) would've grown in the "vast majority" of the markets it operates on a year-over-year basis if not for the significant 800 basis point foreign exchange headwind, CEO Tim Cook said during the company's conference call on Thursday.

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Comments (58)

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Profit only 1.85 per share?
They pay close to zero dividend.
Hoard cash.
Getting their lunch eaten by other cell and tablet ecologies.
Not convinced they will survive longterm.
Have not made a single worthwhile new product since Jobs died.
AFCA 14 profile picture
@jesser6584 If there was a price for dumb comments you’d be a serious contender!
- no hoarding cash, buying back stock
- getting their lunch eaten? By whom? Don’t say Samsung!
- I’m sure they’ll file for bankruptcy before the end of the decade….
- Steve Jobs didn’t invent anything either. AAPL makes existing stuff better
Mr Briggens profile picture
It's like the football announcers say: "If he hadn't been tackled, he'd still be running".
Djreef1966 profile picture
Well, Tim Apple has his own studio now, so why didn’t he call for the Special FX.
El Scorcho profile picture
Well that's a comforting moral victory
I really don't understand the fx issues at not only Apple but several others. I read everyday for quite a while now how the dollar is rapidly declining against other currencies. It was down under 1.02 today after being up to 1.14 or so a while back With this much of a drop is it a problem or an excuse at this point.
Orangejulius profile picture
@8202371 It's a little bit of both. The dollar only really started falling in early November, so results from the past 3 months will still show the Dollar's strength, resulting in poor performance due to forex. That said, there was legitimate weakness in sales due to a lack of demand for all mid to lower iPhone tiers. Apple failed to clarify this in the earnings call. They simply overproduced those low-mid phones and didn't produce enough of the high-end models, likely due to the supply constraints they pointed to that were exclusive to high-end models.

iPads and Macs will see a lot of weakness because there's little to no reason for someone to upgrade when the M2 based models are barely improved over the M1 models from a year before. It's like everyone has been saying; a great deal of Apple's 2020-2021 sales will not be repeated in 2022-2023. It may be the 2023 Q4 - 2024 sales cycle before we see growth normalize again.
@8202371 the USD was/is falling, but YoY comps are still worse.
@Orangejulius --iPads and Macs will see a lot of weakness because there's little to no reason for someone to upgrade when the M2 based models are barely improved over the M1 models from a year before.--

Somehow, you assume that everybody owning Apple devices upgrade at the same time. Not so. Of course, those with an M1 chip will not upgrade to M2 now, but some with Intel (which is still the majority of Mac users) might. Upgrades represent a certain percentage of the installed base, which is pretty constant. And we also need to consider folk using that god-awful MS Windows and other products, whose installed base is many times of Apple's. A lot of Apple's growth will come from that area.
Did anyone catch how the iPad will decline double digits year over year?
Orangejulius profile picture
@ghostblowfish Really not surprising at all. Ipads are the most cyclical product they sell. They oversold a ton of them 2020-2021 and demand has fallen off a cliff in the past 6 months. It'll be another year or two before everyone starts replacing those 2020-2021 models.
Philipsonh profile picture
FX headwinds ? That is why hedging currencies exists.I do not own Apple but am just commenting on Mr Cooks remarks.
How do they get 2B devices? There are no so consumers for their products.
@max cric --How do they get 2B devices?--
I have 7.
John McCoy profile picture
@max cric My company owns thousands of Apple devices.
If! And only if tomorrow’s job report is total gridlock!! Apple, Amazon, META, GOOG and the rest of the Market is going higher!! Blessed!!
MoneyPig profile picture
Sounds bull****. It's easy to count volumes. FX issues, what? The phones are made in China. Sure revenue would get hit by stronger dollar, but Tim fails to mention VOLUMES.

And then, the last bull****er gives gross margins? We selling food here, it's EBITDA that matters bro. That's the measure of management, I am old school baby. Don't fall for that slight of hand.

You sell three products all of which can be held in ones hand and you don't report, VOLUMES. I am suspicious. Is Tim going to call someone from audience up on stage and make them levitate this year?

Doesn't sound good.
@MoneyPig I may be wrong as to what you're saying but I think they stopped reporting specific iPhone etc. numbers some years ago.
Market believes it, wait for 2h 2023
arok79 profile picture
Way to spin it Tim Cook
MoneyPig profile picture

Right? Same here. :)
The FX headwind will moderate soon enough, while China's opening will create a significant tailwind. The shares may decline tomorrow, but when the "shock" is absorbed and the investors realize the report's positivity, the stock will resume its climb in a couple of days.
Winnertakesall profile picture
@milehr Doubtful... my guess is China will be blocked off from the free world here shortly. War drums are beating....
China is the world's factory and cannot be blocked anytime soon. And there will be no war with China, either. Also, there is no "free world" nowadays:-)
Maybe I’m missing something, but the CFO projections would result in a massive beat in the current quarter on the top and bottom lines.
@Dukebailey Yep. And he deserves almost as much credit as Cook for the companies incredible performance over the years.
COOK is cooking! SELL and run for the hill. BAD earnings now wait for the 2023 Q1 with full force of FED hike yet to felt! SELL
dlr.rrx_00 profile picture
The dollar is currently weakening so here comes tail wind💨
@dlr.rrx_00 there will be another excuse next quarter..
"It's not fair!!!C'mon, Fx! You big bad meanie!" Tim Cook
maybe they should raise their prices in foreign markets then..or learn how to hedge.
@MJL987 They did raise prices.
@SaltBeard not in all markets..China for one
MoneyHypeMike profile picture
lmao, so we should ignore FX when it's a tailwind?
@MoneyHypeMike You should realize when FX changes really quickly, which is what happened the last half of last year. The U.S. dollar appreciated very quickly with rates rising so quickly
Stefan Redlich profile picture
@usernamerequiredtoo exactly, and now it is reversing similarly quickly so this is just a 2-3 quarter specialty, nothing to worry. Apple is my biggest position and will remain that. Stock will be green tomorrow I predict
@usernamerequiredtoo actually the dollar peaked vs most currencies in the Oct/Nov time period..been on a downward slide ever since
InvestInMETA profile picture
A near miss during this economic climate? Yeah, still a buyer. Yal bears go ahead and yuck it up, though. Small victories and all that…
@InvestInGAMA stock won’t hit a 15 PE for like 6 years at the CURRENT price. I don’t know the future, but this looks like a T type of stock for the next few years. It might be worth $120, maybe $100. I feel like this stock won’t outperform the market even if I’m wrong. Just an inference tho as it’s defied its valuation for 2-3 years now
@Legitimate Agree . Everybody who wants an Apple device has one, slow growth from here.
InvestInMETA profile picture
@bostonbuster They have 22% of the international market. Plenty of growth left.
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