Apple Year in Review 2023 (Financial Strategy)

As we close out 2023, there is value in taking time to recap the past 12 months. For Apple, one way of recapping the past 12 months is to look at the company from two perspectives: products and financials. In yesterday’s update, we recapped Apple's product strategy. Today, we will analyze Apple’s financial trends in FY2023.

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Apple 2Q23 10-Q Takeaways, Apple's Share Buyback Update, More on Apple’s Stingy Dividend Increases

Happy Tuesday.

In today’s update, we will go over Apple’s 2Q23 10-Q. We will then discuss Apple’s buyback and cash dividend programs.

Let’s jump right in.

Apple 2Q23 10-Q Takeaways

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

The following items from Apple's 2Q23 10-Q jumped out at me.

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

  • iPhone. Net sales were flat in 2Q23. Based on that wording, it sounds like higher ASP was not a major factor in iPhone revenue growth. In the past, Apple has called out a different mix of iPhone models to hint at ASP changes. For reference, the last time Apple called out iPhone mix in the 10-Q, ASP likely was up 10%+ year-over-year. For 2Q23, we are looking at a much smaller increase in ASP given FX headwinds.

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Reading Between the Lines of Apple’s 2Q23 Earnings Q&A With Analysts (Daily Update)

Hello everyone. Welcome to a new week.

Last Friday, we went over the numbers from Apple’s 2Q23 earnings release. We also looked at two of the major themes from earnings: the impact from less device upgrading and Apple’s emerging markets strength.

In today’s update, we will focus on Apple’s earnings Q&A session with analysts. After recapping each question-and-answer exchange that occurred on the call between Apple and sell-side analysts, we will go over my thoughts / response to the exchange. Let’s go beyond what was talked about on the call.

NOTE: The following earnings call questions (“Q (Sell-Side Firm)”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, MarkerBeat offers a written transcript here.

iPhone

Q (Morgan Stanley): Did Apple experience iPhone demand deferral or destruction arising from the COVID shutdowns in late 2022?

Cook: Our 2Q23 results reflected some iPhone demand carryover from 1Q23. iPhone production is back where we want it to be.

My response: Recall our discussion heading into earnings about two variables driving iPhone sales in 2Q23: Underlying customer demand and a sales carryover from 1Q23 related to COVID shutdowns. Cook’s answer implies that

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More on Apple’s Buyback Plan, It’s All About Apple Free Cash Flow, Iger vs. Chapek (Daily Update)

We begin today’s update with a few additional takeaways from Neil’s new report on Apple’s share buyback program. The discussion then turns to a key different between Bob Iger and Bob Chapek and what it means for Disney’s approach to blockbuster movies.

Hello everyone. Welcome to a new week. It’s good to be back after a few days off.

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Let’s jump into today’s update.

More on Apple’s Buyback Plan

The newest Above Avalon Report examined where things currently stand with Apple’s share buyback program and what the future will likely bring.

In recent years, somewhat of an understanding has taken hold when it comes to Apple’s buyback. Wall Street is not as doubtful about Apple’s ability to fund both share buyback and its investment opportunities (capex, R&D, M&A). This doesn’t mean that Apple’s share buyback lacks unknown.

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