More on Apple Share Buyback vs. Market Cap, Thoughts on Apple and a $4 Trillion Market Cap, Thursday Q&A

There is one question that was carried over from last week’s Thursday Q&A that we will address today. What does the current Mac upgrade cycle look like? In addition, there were a few incoming questions regarding Apple’s market cap and buyback. We will tackle those questions first. 

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Apple 2Q23: By the Numbers, Apple Device Upgrading Slows, Apple's Emerging Markets Strength (Daily Update)

Today's special Friday edition of the Daily Update will be focused on reviewing Apple's earnings. The idea is to keep things broad and look at the big picture takeaways. We also examine how Apple’s results compared to Neil’s expectations.

Hello everyone. Welcome to a special edition Friday version of the daily update. We will begin going over Apple’s 2Q23 numbers and conference call.

For today, the focus will be on the key numbers and two big picture takeaways. The discussion will continue next week.

Let’s jump right in.

Apple 2Q23: By the Numbers

There were no major surprises found with Apple’s 2Q23 earnings. Device upgrading has slowed, although Apple continues to bring new users into the fold. While the iPhone, iPad, and Apple Watch look OK, AirPods continues to experience growth turbulence, while the Mac is trying to find sales stabilization. In an environment where gross margin integrity is being rewarded, Apple’s results will get attention.

Apple’s guidance for 3Q23 is close to what sell-side analysts were expecting, which likely will come as a disappointment to some. Looking under the hood, it looks like the U.S. macro environment is indeed sluggish, backing up conclusions from various Fortune 500 firms. Offsetting such disappointment, Apple continues to see strong momentum in emerging markets as the company takes share from Android.

Here are Apple’s reported 2Q23 results versus my expectations with brief commentary for each item.

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Apple 1Q23 10-Q Takeaways, Apple's Share Buyback Update, Revisiting Apple’s Cash Neutral Goal (Daily Update)

Hello everyone. Today’s update will conclude our Apple earnings review as we go over Apple’s 1Q23 10-Q and focus on some balance sheet items (share buyback pace and Apple’s cash neutral goal). The plan is to include an updated version of Neil’s Apple earnings model in tomorrow’s update. Let’s jump right in.

Apple 1Q23 10-Q Takeaways

Published at the end of FY1Q, 2Q, and 3Q, 10-Q filings provide additional commentary and disclosures regarding a company's financial results.

The following items from Apple's 1Q23 10-Q jumped out at me. We will discuss Apple’s share buyback shortly.

Product Details. Apple provided additional commentary behind sales trends for its major product categories.

  • iPhone. Net sales decreased in 1Q23 due “primarily to lower net sales from the Company’s new iPhone models.” The comment is referring to Apple not being able to report iPhone unit sales growth due to iPhone 14 Pro and Pro Max shortages.

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Above Avalon Podcast Episode 179: Winning the Buyback Debate

After years of criticism, doubt, and questions surrounding Apple’s share buyback program, we are at a point where we can say with confidence that the buyback debate has ended and Apple was declared the winner. In episode 179, Neil goes over how the buyback debate began and why so many people underestimated Apple’s ability to both buy back shares and invest in its future at the same time.

To listen to episode 179, go here. 

The complete Above Avalon podcast episode archive is available here. 

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