There's Rich, There's Stupid Rich, and Then There's Apple

The numbers are in. Apple (Nasdaq: AAPL  ) booked $13.87 a share in profits on $46.33 billion in revenue. Wall Street was expecting $10.14 a share of profit on $39.16 billion in revenue, according to Data provided by S&P Capital IQ.

Somewhere, the late Steve Jobs is smiling.

For the most part, Fools and analysts were expecting this sort of performance because we've seen it before. Last quarter's minor miss is a rounding error when observed through the lens of history. Wall Street is more often than not punked when it comes to estimating Apple's results.

And not just on the top and bottom lines. Analysts tend to vary widely in their estimates of iPhones, iPads, and Macs sold. Here's how they fared in Apple's fiscal first quarter:




Last Year

Y-o-Y Growth

iPhones sold 37.04 million 30.25 million 16.235 million 128.1%
iPads sold 15.43 million 13.29 million 7.331 million 110.5%
Macs sold 5.2 million 5.09 million 4.134 million 25.8%

Sources: Fortune magazine, SEC filings, Apple press release.

Interestingly, Apple beat a Morgan Stanley estimate from December that projected as many as 36 million iPhones sold. And that's in a quarter in which Samsung made waves for introducing a genuinely good Android alternative in the Galaxy Nexus. Eat that, Google (Nasdaq: GOOG  ) .

Yet as good as the product results were, 97 is the number Apple investors should focus on. According to its balance sheet, the Mac maker ended the first quarter with:

  • $10.3 billion in cash.
  • $19.8 billion in short-term securities.
  • $67.4 billion in long-term securities.

That's $97 billion in mostly liquid tangible assets and no debt, which means Apple's bank account is about to become a $100 billion company. And you thought only Donald Trump was stupid rich.

Finally, will someone please pass these results to new Research In Motion (Nasdaq: RIMM  ) chief executive Thorsten Heins? Drastic changes are needed, sir. The data above reveals in black and white what the rest of us have long known: the iPhone is eating the BlackBerry's lunch. Do something about it or sell RIM to someone who can.

Apple's undoubtedly an absolute all-star, but many investors don't realize the number of other companies benefiting from the very same drivers that sent Apple's stock into the stratosphere. Fortunately, the Fool recently compiled a research report detailing three stocks positioned to profit from the rise of smartphones and tablets. It's yours free, but only for a limited time, so take a look today.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Apple and Google and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (15) | Recommend This Article (27)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 24, 2012, at 5:33 PM, Ostrowsr wrote:


  • Report this Comment On January 24, 2012, at 5:35 PM, kramsigenak wrote:

    Yee effen Haw!

  • Report this Comment On January 24, 2012, at 5:56 PM, astroorbiter wrote:

    Down -7... Who the heck sold today?

  • Report this Comment On January 24, 2012, at 6:09 PM, cabvoltaire wrote:

    I received a doom's day email from Fool warning that Apple would be woefully behind in their sales of the iPad due to the Kindle Fire. So, I sank in my chair and thought - maybe they're right. They're such persuasive writers - I thought they may be right. These guys are trying to help me!

    Well, thanks a lot.

    There's so much posturing from the Fool to warn everyone of pending doom - that they have insider knowledge. I'm the fool for believing them - I mean - why would they tell what they really think?

    I'm sure they bought AAPL at the opening bell today... ;-)

  • Report this Comment On January 24, 2012, at 6:45 PM, wolfhounds wrote:

    AAPL down the last 2 days? Blame it partly on all the talking heads who couldn't figure WHAT AAPL is, and my belief options traders were on the wrong side. After the last quarter I said thank you and bought Jan 13 370 calls. Today after listening to so much chatter that mostly dismissed the channel checks, I sold Jan 27 420 puts. It's rare for me to make such speculative plays, but I have many analysts to thank. I also have the excellent analysis of TMF to thank.

  • Report this Comment On January 24, 2012, at 7:24 PM, Turfscape wrote:

    "And you thought only Donald Trump was stupid rich."'re half right on that.

  • Report this Comment On January 24, 2012, at 7:53 PM, pbearl300 wrote:

    I don't think Donald is even in the 'gets invited to rich guy parties' rich.

    And on another note: Has anyone ever SEEN a Kindle Fire? I hear they are for sale, and supposedly have sold in the millions, but never, not one have I seen in real life. I was seeing iPads when the sales were still below 1 million. Makes me wonder about the metrics Amazon uses, and have heard that for ranking, and the public numbers that they count every search on as a sale.

    Thank you APPLE!!!!! When the market opens in the AM, market cap will be 418Billion, Apple will be the largest public company, and my $10000 invested in 1997 will be worth a little over 2 million! YahFreakingHooooooo.

  • Report this Comment On January 24, 2012, at 8:00 PM, jdwelch62 wrote:

    @cabvoltaire, there's actually a variety of opinions at MF on Apple, so no sour grapes, OK? If you didn't see this coming, it was your own fault, not The Fools'.

    Seriously, who was selling today? AAPL is up over $31 in after-hours trading. Can't wait to see what tomorrow brings.

    I'm really happy with today's results, of course, but I'm still not sure that Apple can continue to innovate beyond the next 3 years without Jobs. I think he left enough ideas in their pipeline to keep them going for about 3 years, maybe 4, but after that, they're going to have to prove at the end of that period that they learned from their former leader how to innovate on their own, or this will be a footnote in history. I made an Outperform CAPS call on AAPL, but only for the next 3 years. That's why I think it's only 3 stars on CAPS, @Ostrowst, 'cuz nobody's sure they can keep this up for 5 or more years without Steve.

    With $97B in liquidity, I sure hope that Tim Cook and the Board decide to get serious and give a LOT of that back to shareholders in the form of a dividend. That will boost the price some more, and give AAPL some legs beyond the 3 year window I've pegged for them to run out of innovations, or at least slow down on innovations. If they can do half as well without Jobs as they've done in the past 10 years in terms on introducing new devices that we didn't know we absolutely needed to have until we had them, and they're paying a nice dividend, the price will hold up for a while...


  • Report this Comment On January 24, 2012, at 8:08 PM, jdwelch62 wrote:

    @pbear1300: Congratulations! Wish I'd done that. As far as a Kindle Fire goes, my son got one for Christmas from his auntie, and had it with him when he visited for the holiday, so I got to play with it. It's not bad, but it's not an iPad; but then again, it's $200 and not $500-to-$850. For the price, it's pretty decent. I was torn between getting one for myself for my recent birthday or getting an iPad (I didn't invest in AAPL until 2011, so I need to watch my nickles and dimes), so I read a ton of head-to-head comparison reviews, and it seemed to come down to 1) there are Way more apps for the iPad then there are for the Kindle Fire, and 2) the general consensus seemed to be, if you can afford the iPad, get the iPad. I did notice that my son's Fire's web browser crashed a couple of times while I was using it, and the sound sucks compared to an iPad. So, I got the stripped-down, no 3G radio iPad, and I'm glad I did. I heard recently that there's a 20% return rate on the Kindle Fire, but I can't confirm that. So, they're out there, and they're affordable, but, like I said, they're not iPads...

  • Report this Comment On January 24, 2012, at 9:11 PM, leradron wrote:

    As an aapl stockholder but an android tablet and phone user my only concern is that any quarter now the masses will catch on that aapl has been left behind for some months now. But its not happening!

  • Report this Comment On January 24, 2012, at 11:31 PM, jelp2 wrote:

    Do you think Apple can start using all their profits by bringing manufacturing jobs back to the USA and out of China? Or will that just cut into their profits?

  • Report this Comment On January 25, 2012, at 2:05 AM, Dekabrist wrote:

    RIM is the KODAK of the phone world, I think. I love Apple to the core. Weird that the CAPS rating is not maxed out!

  • Report this Comment On January 25, 2012, at 2:11 AM, Dekabrist wrote:

    Oh and cabvoltaire, jdwelch62 is correct. I've been a Fool in SA for nearly a year and it took me a while to work it out. The core recommendations and the BBNs are the ones you should heed - and investigate yourself. The other TMF articles are opinions, not recommendations. Perhaps there should be a 'foolish guide for new fools' where the philosophy and TMF are explained.

  • Report this Comment On January 25, 2012, at 10:03 AM, TMFDarwood11 wrote:

    I too wonder if AAPL will bring some manufacturing home, or move some of it to a country where work conditions are more aligned with what I would expect from a purported "great" company. Alternatively AAPL could really press Foxconn to improve work conditions, but that too would increase AAPL's costs.

    Since any and all of these measures would probably reduce profits, I'm not holding my breath.

  • Report this Comment On January 25, 2012, at 2:12 PM, jdwelch62 wrote:

    @Darwood11, considering how high AAPL's profits are (not sure what their margins are), it looks to me like they could put some pressure on Foxconn to improve working conditions and afford to take a small hit on their profits in return for a better perception by the world that they actually care about their suppliers' workers conditions. Otherwise, at these levels, to sit by and not do anything just looks like greed. IMHO, at least...

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