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Apple earnings release Q2 2013: relentless drive or signs of trouble?

by May 4, 2013






Apple earnings release Q2 2013!

continuation of the relentless drive to greatness?
or signs of trouble are brewing?

Latest AAPL financial reports are charted below, as reported by the company.
We have added some comments below charts.
It’s your turn to decide whether AAPL is a sell, a buy or maybe just hold.
Comments welcome.

Apple earnings release Q2 2013, Chart showing: revenues, cost of goods sold, gross margin

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Apple (AAPL) sales increased YoY, however gross margin decreased. This signals that while Apple products are still selling well, increased competition pressures on margin. That may well reverse if new products are launched.

Apple earnings release Q2 2013, Chart showing: gross margin, OPEX, operating income

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Adding to the decreased gross margin, Apple’s operating expenses increased YoY, cutting even more on the operating income.

Apple earnings release Q2 2013, Chart showing: details on operating margins

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A little detail on Apple’s Q2 2013 margins. Nothing new so far.

Apple earnings release Q2 2013, net income chart

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A little more detail of how gross margin works out as net profit.

Apple earnings release Q2 2013, revenue and costs chart

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Detailed revenue versus costs are presented here for perspective.

Apple earnings release Q2 2013, assets and liabilities chart

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Overall Apple’s balance sheet quality increased: more long-term assets doubled by more equity, despite overall balance sheet size decreased. Current assets decreased on account of decreased sales QoQ.

Apple earnings release Q2 2013, current assets chart

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Current assets particularly include mostly cash and securities, and quite little inventory and receivables. No inventory build-up particularly.

Apple earnings release Q2 2013, long term assets chart

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A tremendous build-up of long-term securities, over $105 billion, dwarfing the GDP of most countries on Earth. Property, plant and equipment decreased, maybe a better utilization ratio or just more outsourcing.

Apple earnings release Q2 2013, current liabilities chart

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A quite low figure for accounts payable – maybe lower production ahead? That could be a serious alarm bell!

Apple earnings release Q2 2013, equity chart

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Equity increased relentlessly, to a total of $135.5 billion.

Apple earnings release Q2 2013, cash flows overview chart

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Operating cash flow decreased YoY, apparently not good, chart below gives a little more insight.

Apple earnings release Q2 2013, operating cash flows chart

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Part of Apple’s cash flow decline YoY is explained by the company paying la large amount of accounts payable. That correlates with decreased accounts payable (as shown above in the current liabilities chart), but as well indicates possible lower production (and lower sales as well) ahead. Be aware!

Apple earnings release Q2 2013, non-cash flows chart

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Despite share price decline, and decreased profits YoY, AAPL still managed to pay more share compensation expenses.

Apple earnings release Q2 2013, financing cash flows chart

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A little cash back to investors. Note stock repurchase program did not succeed to stop the stock price decline. Troublesome.

Apple earnings release Q2 2013, investment cash flows chart

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No major acquisition yet, except some fixed assets.

Final comment on Apple earnings release Q2 2013: We are not worried for the weakness in Apple earnings and profits, as released for Q2 2013, that may get fixed soon with some Apple TV, iWatch or some other innovative products.
It’s the accounts payable position that signal a possible cut in orders and possible lower sales, that actually worry us.


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