Apple Reports All-Time Record Third Quarter Results , But Is The Computing Giant Now On The Decline?
This week we reviewed Apple's financial statements and their MD&A, as well as an SEC Briefing on How to analyze financial statements. Then as a group, we discussed Apple's 6/25/2011 financial statement to determine if we agreed with its assertions and whether or not we would invest in Apple.
No doubt, Apple has had an incredible year. Record quarterly revenue of over $28 billion and record quarterly net profit of over $7 billion, and not one, but TWO all-star products -- iPad and iPhone -- that have both seen over 140% unit sales growth over the last year. It is perfectly clear why Apple CEO Peter Oppenheimer asserts that Apple is "defining the future of mobile media and computing devices."
Nevertheless, with recent passing of tech icon and Apple guru Steve Jobs, and aggressive competition from companies including the computing giant, Google whose Android phones are giving iPhone a run for its money while Google's cloud computing services and Chrome OS are not only free to use, but have beaten Apple's fall releases (iOS5 and iCloud) to the consumer.
Still, Apple has had a spectacular quarter in a spectacular year, managing to increase their operating margin from 28% to 31% in just a year, while taking their P/E ratio from 25.4 to 15.8, making Apple investors very happy. Given this stellar performance, I still cannot recommend Apple as a wise investment. Even their own projections for the fourth quarter show a slowing of this upward trend which makes this the wrong time to buy.
This week we reviewed Apple's financial statements and their MD&A, as well as an SEC Briefing on How to analyze financial statements. Then as a group, we discussed Apple's 6/25/2011 financial statement to determine if we agreed with its assertions and whether or not we would invest in Apple.
No doubt, Apple has had an incredible year. Record quarterly revenue of over $28 billion and record quarterly net profit of over $7 billion, and not one, but TWO all-star products -- iPad and iPhone -- that have both seen over 140% unit sales growth over the last year. It is perfectly clear why Apple CEO Peter Oppenheimer asserts that Apple is "defining the future of mobile media and computing devices."
Nevertheless, with recent passing of tech icon and Apple guru Steve Jobs, and aggressive competition from companies including the computing giant, Google whose Android phones are giving iPhone a run for its money while Google's cloud computing services and Chrome OS are not only free to use, but have beaten Apple's fall releases (iOS5 and iCloud) to the consumer.
Still, Apple has had a spectacular quarter in a spectacular year, managing to increase their operating margin from 28% to 31% in just a year, while taking their P/E ratio from 25.4 to 15.8, making Apple investors very happy. Given this stellar performance, I still cannot recommend Apple as a wise investment. Even their own projections for the fourth quarter show a slowing of this upward trend which makes this the wrong time to buy.
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