[HN Gopher] Apple Reports Fourth Quarter Results
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Apple Reports Fourth Quarter Results
Author : Bahamut
Score : 57 points
Date : 2021-10-28 20:32 UTC (2 hours ago)
(HTM) web link (www.apple.com)
(TXT) w3m dump (www.apple.com)
| throwaway4good wrote:
| There is a fairly big drop (-3.4%) in the after market.
|
| So I guess those results are a disappointment.
| [deleted]
| sgt wrote:
| Isn't a $0.22 dividend per common share quite low?
| nabla9 wrote:
| They use mostly share buybacks to return money to investors.
| r0fl wrote:
| Same as before. I'm surprised they didn't increase it.
| [deleted]
| abhv wrote:
| Dividends are not an efficient mechanism to return cash to
| investors. The recipient is forcefully taxed.
|
| Share buybacks technically accomplish the same; the
| proportional increase in shareholder value should be the
| same. However, investors who do not want to recognize income
| that year do not have to; whereas investors who need the
| dividend income can sell a small number of appreciated
| shares.
| rileymat2 wrote:
| I need to look at this more, but don't dividends mostly
| return real current earnings where share buybacks are
| moving your return to future earnings which may never
| exist?
|
| Also, many people are harmed by this tax treatment because
| a couple making 80k a year pay no tax on the dividend
| capital gains?
|
| I am just saying dividends v share buybacks are not the
| same and have other effects.
| ghaff wrote:
| Yeah. They're different. Dividends give you cash on the
| barrel each quarter that is very sticky about heading in
| a downward direction--but tax treatment is pretty much
| like ordinary income in most cases.
|
| Stock buybacks may drive stock prices upwards in an
| unpredictable way that may lead to being able to sell
| appreciated stock in a tax-advantaged way a couple years
| out.
|
| Theoretically, it's all the same after tax effects but we
| don't live in that theoretical world.
| rileymat2 wrote:
| https://www.nerdwallet.com/article/taxes/dividend-tax-
| rate
|
| These are lower than ordinary income.
| ghaff wrote:
| As the article says, it depends.
| dkonofalski wrote:
| I think, historically, Apple's dividends have been pretty low
| in general. Most of my dividends from other stocks are much
| higher.
| sz4kerto wrote:
| Given that tech companies don't tend to pay any dividends, it's
| good.
| syspec wrote:
| You have to take the recent split into account.
| oh_sigh wrote:
| No, since there was a 4:1 split last August. $0.22/share is
| historically high:
|
| https://investor.apple.com/dividend-history/default.aspx
| jbverschoor wrote:
| I don't think it is. The dividend yield was in the 1.5-2%
| range about 10 years ago iirc.
| zsmi wrote:
| There was a 4:1 split in July, 2020 so it's comparable to the
| $0.82 dividend Apple was issuing earlier in 2020.
|
| https://investor.apple.com/dividend-history/default.aspx
| MangoCoffee wrote:
| >"This year we launched our most powerful products ever, from
| M1-powered Macs to an iPhone 13 lineup that is setting a new
| standard for performance and empowering our customers to create
| and connect in new ways," said Tim Cook
|
| one platform for all their products. (one ring to rule them all)
| how much did Apple saved by going with their own in-house
| designed chip?
| jbverschoor wrote:
| Cost of products went from 70% to 66% and will only decrease I
| presume
| darwinwhy wrote:
| This is very good news for them, since their services revenue
| looks to be at risk due to antitrust scrutiny.
| syspec wrote:
| You keep repeating that, are you trying to will it into
| existence?
| colinmhayes wrote:
| Google just cut their fee by 15%. Apple can't be too far
| behind.
| kube-system wrote:
| I think it's factual statement. When regulators are
| investigating one of your business practices, that is a
| business risk.
|
| https://www.reuters.com/technology/apple-likely-face-doj-
| ant...
|
| https://www.reuters.com/technology/exclusive-eu-
| antitrust-re...
| spsful wrote:
| I've never heard of this before. Are you talking about
| services like Apple pay, arcade, tv+, fitness+, icloud+?
| klelatti wrote:
| Presumably App Store fees as the 30% is under scrutiny /
| threat in lots of jurisdictions.
| Spartan-S63 wrote:
| Then it's good news they're branching out their services
| beyond just the App Store commission.
| klelatti wrote:
| Indeed. Actually I think the impact will be less than
| many expect - it's definitely not going to zero!
| jbverschoor wrote:
| Yup.. watch out aws, gcp, azure
| zsmi wrote:
| > as we continue to make progress toward our goal of reaching a
| net cash neutral position over time
|
| Can someone more business savvy explain what that means?
| sandymcmurray wrote:
| This started in 2018. See
| https://www.fool.com/investing/2018/02/02/understanding-appl...
| pdpi wrote:
| Apple has massive cash reserves that it can't really put to
| use. That cash isn't doing much of anything for anybody, so
| growing it any further is pointless. Going cash neutral here
| means "instead of uselessly adding to our cash reserves, we're
| going to aggressively dispose of our revenue", which presumably
| means dividends (they wouldn't have the cash reserves they do
| if they thought they had other productive ways to spend the
| money)
| novok wrote:
| Apple could hire more engineers to make it's software less
| buggy at least and to fix a lot of long time small
| annoyances. And to double their devtools engineer count to
| make the entire company and all of their external developers
| more effective.
| pwinnski wrote:
| You think adding more engineers would make their software
| _less_ buggy? Really? This seems contrary to literally
| everything I have ever read, experienced, or in any way
| known for my entire career, including reading books written
| about software engineering 30+ years ago.
| Gigachad wrote:
| They could create more products with their own teams.
| Apples cloud offering pales in comparison to Google's and
| part of the reason is they are just missing too many
| services. iCloud web feels like a bare minimum effort
| that doesn't get any attention.
|
| I don't know how successful this would be, but they could
| also start building and selling more apps/programs but
| perhaps this could be seen as anti competitive.
| rsj_hn wrote:
| One way it can work is if devs are already overcommitted
| on multiple projects, so letting them focus more does
| help. E.g. horizontal scaling, rather than piling more
| devs onto the same project.
| iamcreasy wrote:
| Isn't cash looses its value over time due to inflation? Why
| Apple maintains a cash reserve?
| HWR_14 wrote:
| I believe the "cash reserve" isn't pure cash, but instead
| very liquid assets.
| ghaff wrote:
| "Cash" in balance sheet accounting-speak isn't limited to
| the dollar bills under Tim Cook's mattress. It refers to a
| large number of essentially "cash equivalent" things that
| can be converted to cash quickly and easily, albeit at
| essentially risk-free rates of return.
|
| You maintain a cash reserve so that, if there is a
| (hopefully) short-term market correction, you're not stuck
| with having to sell assets in a dip to meet payroll, etc.
| Not really much different from people in that regard
| although obviously at a different scale.
| qeternity wrote:
| Apple owns a hedge fund (the largest in the world) to do
| just this.
|
| Braeburn Capital.
| kuratkull wrote:
| They have it stored around the world, moving it to the US
| would force them to pay taxes
| mikeyouse wrote:
| Only in an accounting sense is their money stored "around
| the world". It's all managed by their Nevada investment
| company Braeburn Capital. They can freely move it to
| banks in the US or to anywhere else they need it, it's
| only "overseas" in the sense that they recognized the
| revenue elsewhere.
|
| Cash and cash equivalents is the line on the balance
| sheet and includes things like T-Bills and other low-risk
| investments. Apple almost certainly does better than
| inflation and regardless, it's completely normal treasury
| management to return ~0% since if your shareholders
| wanted exposure to riskier assets, they'd buy those
| assets with their own money.
| colinmhayes wrote:
| > They can freely move it to banks in the US or to
| anywhere else they need it
|
| But then they'd have a massive tax bill.
| [deleted]
| Angostura wrote:
| I suppose it could also mean increased investment in plant,
| R&D. aquisitions or reduced margins.
| smoldesu wrote:
| I'd hope that money could be put towards researching ways
| to make their machines less fragile, or how to engineer an
| M.2 slot in a professional device with more than enough
| room. Maybe a thinner camera?
| [deleted]
| matwood wrote:
| As other explained, it's to keep cash inflows and outflows as
| close to even as possible. They have enough cash for future
| investments and thus don't need to stockpile any more. Apple
| has been saying this for awhile, and at this point I see it as
| a joke/humblebrag ('we're making so much money we literally
| can't spend it all').
| smoldesu wrote:
| It's not a joke when the SEC isn't laughing.
| nabla9 wrote:
| It means that they plan neither accumulate or decrease their
| net cash holdings.
|
| No dividends or stock buybacks to reduce cash, but no
| accumulating it either.
| [deleted]
| klelatti wrote:
| FT reporting that sales $6bn lower due to component shortages-
| that's a substantial hit.
| darwinwhy wrote:
| Services revenue is at risk due to increased antitrust scrutiny
| worldwide. The more Apple focuses on services, the bigger the
| potential downside on their valuation.
| neom wrote:
| On the plus side, they have ~24 years of runway in the bank
| just in case things go south. :)
| klelatti wrote:
| Gross margin on the the increase in services sales looks
| astonishing. Has there been a one off increase in eg fees for
| Google search in services revenue?
| Synaesthesia wrote:
| It always had a lot of potential in terms of profitability,
| theoretically you can get the marginal cost of a digital item
| to nearly zero if you have a large scale.
| klelatti wrote:
| Agreed but lots of Apple's growing services don't have low
| marginal costs - Apple Music - or they are investing heavily
| - Apple TV - so this seemed a bit surprising.
| lvl100 wrote:
| iPhone 13 is not going to sell well. And while I believe they
| will sell a good amount of laptops this holiday season, they are
| relatively low margin products and do not represent cross selling
| opportunities as you do with phones.
|
| This is to say, Apple "needs" a new major product. Car is a
| moonshot but I personally think they can easily tackle the gaming
| space. They have all the right pieces to create $500B market cap.
| dano wrote:
| Is that 500B in annual revenue maybe? Apples current market cap
| is $2.5T.
| 0x00000000 wrote:
| A VR/AR play seems inevitable too
| ghaff wrote:
| At some point, probably. Very unclear when and what it looks
| like at this point. Aside from niche commercial use cases, I
| certainly haven't seen anything that especially interests me.
| Gigachad wrote:
| For some reason Apple seems to pay no attention to anything
| other than casual games. They completely crippled the mac
| gaming scene which was doing OK when they killed 32bit and
| never implemented vulkan support. IMO they can't embrace VR
| without going back and helping the game developer scene in
| getting the tooling they need to make mac support easy.
| windowsrookie wrote:
| The iPhone 13 has a ~3 week shipping estimate right now. So it
| seems to be selling just fine. Maybe that's due to the chip
| shortage, but regardless, they are selling as many as they can
| make right now.
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