Curiouser and curiouser

Apple on Jan. 23 reported revenue of $54.5 billion for the quarter ending Dec. 29, an increase of 18 percent from the same period a year earlier. Net income was flat at $13.1 billion. The company sold 47.8 million iPhones, 22.9 million iPads and 4.1 million Mac computers. In the same quarter for 2011, Apple sold 37 million iPhones, 15.4 million iPads and 5.2 million Macs. Apple reported $137 billion of cash and investments on its balance sheet at the end of the quarter. Apple finally succumbs to uncreative destruction 23 January 2013 | By Robert Cyran Apple has finally succumbed to uncreative destruction. A five-year run with the iPhone and iPad catapulted the company to investment royalty, but it’s coming to an end. Over $50 billion of market value - nearly the equivalent of HP and Dell combined - vaporized in the hours after Apple reported flat fourth-quarter profit. Copycats are gaining and margins are shrinking. Chief Executive Tim Cook needs a real innovation to escape this Red Queen’s race. A collection of evolutionary upgrades is helping Apple compete with rising rival Samsung, but only up to a point. The top line grew 18 percent from a year earlier, with almost 48 million iPhones and 23 million iPads sold in the quarter. Unfortunately, the bottom line isn’t keeping pace. The new iPad mini is in hot demand, but isn’t as profitable as its bigger brother. And while the iPhone 5 is also attracting plenty of customers, it’s proving expensive to produce. Apple’s operating margin fell nearly six percentage points to 31.6 percent. Essentially, Apple is running faster and faster simply to stand still. The danger, of course, is that the treadmill accelerates faster than Apple can run and rivals catch up. Or Apple slips, and introduces a real dud beyond just a wonky maps app. Investors are obviously bracing for it. Including the 10 percent after-hours decline on Wednesday, the shares trade at about 10 times last year’s earnings. Apple’s $137 billion of cash and investments provides a nice cushion against any fall. The sum accounts for nearly a third of its market capitalization. Apple’s best hope, however, isn’t from dividends, share buybacks or the introduction of another slightly modified and cheaper iPhone. It is to do what it has done best: run in a different direction. The company’s phenomenal growth has come from introducing devices people didn’t even know they wanted. Whether it’s in payments, TV or some other secret project, Apple will have to pick up the pace. ======= Exxon Mobil regains market-value crown from slumping Apple Fri, Jan 25 17:37 PM EST By Rodrigo Campos NEW YORK (Reuters) - Exxon Mobil Corp has reclaimed its place as the largest U.S. publicly traded company by market value one year after losing it to Apple Inc, as shares of the technology giant extended their recent fall on Friday. Apple's market capitalization has fallen by about $250 billion - roughly the total market value of Google Inc - since hitting a high last September, when the stock traded above $700. Apple shares traded as low as $435 before closing down 2.4 percent on Friday at $439.88, for a market value of roughly $413 billion. Exxon shares, up 0.4 percent on the day to $91.73, added to a market value of about $418.2 billion. Apple "was clearly a momentum stock. Whenever the numbers behind momentum stocks stop, the momentum players are out and the stock tumbles," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh. There was heavy volume in Apple shares as they hit the session low shortly before the closing bell. The stock dropped by as much as $7, to $435 from $442, within the span of 1 second during the last minute of trading. More than 50 orders were executed on NYSE Arca at $435 a share, according to Thomson Reuters time-and-sales data, in blocks as small as 100 shares and as large as 10,494 shares. No other exchange executed orders at a price lower than $438 a share prior to the day's close. After those trades went through, the stock resumed its earlier levels around $442 a share before closing at $439.88. Apple shares slid 12.4 percent on Thursday - their biggest percentage drop since late September 2008 - as disappointing holiday-period iPhone sales reinforced fears the company is losing its dominance in smartphones. Apple shipped a record 47.8 million iPhones in the December quarter, up 29 percent from a year earlier. But that lagged the 50 million that analysts on average had projected. "They make great products, expensive products, but as a value investor I'm interested in the unloved stocks, just not the recently unloved ones," Forrest said. Apple's reign as largest company by market value began in the last week of January 2012, when it surpassed Exxon. (Editing by James Dalgleish, Sofina Mirza-Reid and Matthew Lewis)