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Morningstar Senior Analyst Michael Holt and FBN’s Robert Grey and Shibani Joshi break down Apple’s third-quarter earnings results.
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And so -- we want to bring in our all star panel Michael holt senior analyst at Morningstar Shibani Joshi I'm Robert Gray who is ready to break came of those numbers as soon as they cross your body.
Let's begin with the -- I guess the question is.
Is it all about the iPhone and of course the impending iPhone 5 which could have an impact on revenue just a little bit in his report.
Yet because of the iPhone 5 is actually all about the iPad this quarter actually we're expecting a net iPad than you iPad which came out and marches as a first full quarter.
In which -- -- -- was fully sold in Asian markets international markets as well.
And that's one of the things analysts will be paying attention to don't wanna call -- throw -- quarter this is an important set up quarter for that -- in the holiday season that's coming up -- -- Michael as these numbers come out we put on our screen that stock is falling at the moment.
We it digging through each of the pieces of data here that look about this but.
In essence one of the things that I can say is if there and and this is not moving positively here what do you think is in here.
Like I can't see the numbers -- so four million Macs during the murder.
That's a 2% per -- increase year over year.
It's really all about the iPhone -- iPad is coercive we've got to see those numbers okay here's an -- -- I was gonna -- that go ahead.
It whatever we're gonna see is -- second it.
It's unlikely to change our long term outlook because this is really -- this quarter we expect the public so -- when we have the -- phone number is 26 million iphones in the quarter Robert.
Yeah that's right less than seventeen million ipads ago where -- but achieving only nine dollars and 32 cents.
In profit 35 billion dollars in revenue both missing the marked -- the shares tumbling 25 bucks here.
On first first glance again 26 million -- cards.
Below most analysts' expectations some.
Even expecting it's a surprise on the upside after AT&T'S numbers earlier today you what you did at four million Macs sold during the period as well seventeen million ipads.
We're sold then as well but again I -- huge disappointment off the top here and don't forget to that they cash dividend of course that was expected as well -- 265 to share.
-- let me bring -- -- -- seventy million -- is -- just oldest -- -- six million iphones what's your reaction yet you know I think that there is a -- whisper number that we -- get over thirty million with the -- zone in the fact that we fell below Wall Street consensus at 26 million I think is a disappointment.
-- coming in better than expected Macs pretty much in line gross margins just checked checked out its margins we know.
That they would be under pressure with more I passes are more costly than they have a lower profit margin gross margin.
42 point eight and the street was looking for 43.
Point 68 so you do see some margin pressure as well and that is sad that the wrong saying that analysts and they didn't wanna see that as well Michael a -- This for apple this is -- A long time since we saw anything like that for years they have under promised and then.
Have to -- over deliver what happened here.
This is really consumers just gearing up for the next.
-- the release of the next iPhone so you're saying yeah you're saying -- consumer was in essence frozen.
That they didn't want to buy -- that current I felt they had to wait for the next one.
It's it's that and it's also that hit the lower price points people are are converting over to android devices those two things going on there.
In fact is when -- light on iphones but had an ipads -- still gonna fill that.
That -- point because I Paterson so much lower gross margin so -- second -- offset.
That Ted when you're seeing on the iPhone side.
Let's bring Robert Graham for moral numbers as we dig through this report products.
Yet out a lot of not clues in here that I found so far for the next for the current quarter and beyond that they do have that -- forecast and as it -- it as it is well below the street here at 34 billion dollars of revenue number the estimates for the street.
Almost 37 billion and that the estimate for profited apples seven dollar 65 cents the estimate there's about ten -- you about ten and a quarter.
They're so well again very very conservative it's very typical of apple to come in yet to under -- then try to over deliver which they failed to do this quarter obviously but again.
Very conservative -- that it's not helping guide the shares you -- in after hours okay.
But look the Shibani you you're looking at some of these numbers that it appears in the aggregate all -- is either slowed down or the velocity of -- growth has slowed down.
Yet you know what's interesting is that -- -- headline here 62% of the company's revenues being driven by international markets 62%.
It's not an issue of of a lack of demand here international company got customers out there can not wait to get their hands.
On the newest I pat on iphones were asked which just came out in certain markets sat in Asia as well.
But with the lack of that -- on that that driver to by the -- -- we're seeing it really significantly impact the US market which behind China are ahead of China.
It's really the key driver for this company so this is like I said not a throw away quarter.
But it's set up but it but as he mentioned this company sets it -- to leap it leap over.
Its own low bar here and it wasn't able to -- and I think that is a real surprise considering.
They do this so spectacularly.
Quarter after quarter after quarter.
