I’m so excited, Apple “beat the estimates”


Fantastic news, tell me about the results

Revenue declined 3%

Hang on, inflation is +5% so that’s -8% real

Yes, but in “constant currency” terms they grew by 2%

That’s nonsense – this is a global business and currencies aren’t constant

Imagine a bank reporting “constant interest rates” or an oil company reporting “constant oil prices”

But they “beat the estimates”

Haven’t you realised by now, that these companies guide analysts with their estimates PRECISELY so they can beat them?

Earnings per share was $1.52

And did that grow?

No, but they … STOP

And any movement in weighted average shares?

Yes, they fell 3.4% y/y

So fewer shares in issue but EPS didn’t grow…

sounds like operating income declined

Yes, by 6%

And free cash flow?

Fell 20%

Share-based comp?

Up 7%

Well, at least something else went up….

other than inventory (+37%) and accounts receivable (+14%)

What about higher interest income on all their cash?

They have $107bn of debt so net cash is not as high as you might think $57bn

But that’s only 2.2% of their $2.6trn market cap, hardly the downside protection of the old days when net cash was half their market cap

Well, they spent $39bn buying back shares plus another $2.7bn paying taxes for their share awards …

So, 75% of free cash flow buying back shares

And the number of shares at year-end fell by how much?


What’s the historic PE ratio?

28 although they did increase their dividend by 4%

It’s the yield that’s important, not the increase off a low base

I see – that’s only 0.55%

So let me get this straight, you’re excited about paying 28 times earnings for a $2.6trn company with declining revenue, zero EPS growth, and hardly any cash where your only hope of a positive return, is 0.55% unless you can find a “greater fool” willing to pay more than 28times earnings for your shares

Well, they did mention “artificial intelligence” on the call so that’s exciting

Maybe the only thing “artificial”, is thinking that owning Apple is “intelligent”