Apple Inc. just reported a record 70 percent jump in profit for its fiscal fourth quarter, and thinks its clever really clever.
The increase was, of course, much higher than Wall Street dared dream, and certainly merits some envious eyebrow-raising. Net income reached $4.31 billion, compared to $2.53 billion a year ago. Sales jumped 67 percent to $20.34 billion. Meanwhile, analysts were only expecting $18.9 billion in revenue.
But the giant surges should come as no surprise. Yes, the staggering leaps are thanks mostly to sales of the iPhone and the iPad (14.1 million and 4.19 million units, respectively). But theres so much more to Apples stunning results, thanks to some balance-sheet magic.
Recall that the iPhone/iPad/iPod/Mac maker a few quarters ago changed its accounting practices, big-time iPhone and Apple TV revenue are now accounted for all at once, rather than over a 24-month period. The change has allowed Apple to exceed Wall Streets hopes by double-digit percentages, yet the company has continued to lowball its projected earnings. (Its been doing this for four years now, even before the accounting adjustment.)
And thats whats so annoying. Does Apple not think people are aware of the accounting shift? Theres little reason, from a practical perspective, for Apple to play coy. We all know what the company is doing. But that reasoning loses some air when considered from a marketing point of view. In that vein, Apple has every reason to entice people to invest in its stock and probably stands a better chance of doing so when it blows past its publicly released projections. Now, though, it just seems easier to start expecting crazy-high earnings from the electronics maker. And thats the kind of presumption that can lead to a big downfall.
AT&T, CenturyLink and Connectwise are among those adding drama to telecom, IT and the channel since last fall. https://t.co/YTBVQGjWqt
February 24 2018 @ 12:15:30 UTC