WEBVTT - Apple and Lyft Report Mixed Results 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.680 editors who bring you America's most trusted business magazine. 0:00:09.119 --> 0:00:12.039 Plus global business finance and tech news. 0:00:12.200 --> 0:00:16.279 The Bloomberg Business Week Podcast with Carol Messer and Tim 0:00:16.320 --> 0:00:18.960 Stenebek from Bloomberg Radio. 0:00:20.360 --> 0:00:22.480 I got to say investors not loving what they got 0:00:22.520 --> 0:00:25.759 from a Lift. That stock actually down thirteen percent. I 0:00:25.760 --> 0:00:27.440 think I might have said one percent, but I meant 0:00:27.680 --> 0:00:29.600 down about a buck fifty and it's actually down about 0:00:29.600 --> 0:00:33.120 fourteen percent in the aftermarket. It's really a killing here. 0:00:33.200 --> 0:00:35.440 Let's get to it with our Bloomberg Intelligence senior tech 0:00:35.479 --> 0:00:38.400 industry analyst, man Deep Singh here in our Bloomberg Interactive 0:00:38.400 --> 0:00:41.240 Broker studio going through his phone, going through the headlines. 0:00:41.280 --> 0:00:42.559 It's down eleven percent? 0:00:43.880 --> 0:00:44.559 What's up with this? 0:00:45.120 --> 0:00:48.680 Also top line growth to compare lyft to Uber and 0:00:48.800 --> 0:00:53.040 door Dash for just reported like Clift growing twelve percent. 0:00:53.200 --> 0:00:57.240 Fourteen percent is just not enough. And you know Uber 0:00:57.440 --> 0:01:00.520 had thirty percent growth in its mobility segment and you 0:01:00.600 --> 0:01:03.640 see the same way DoorDash growing twenty seven percent. And 0:01:03.720 --> 0:01:07.240 these companies have much higher base, you know, so Lift 0:01:07.319 --> 0:01:12.400 clearly has execution issues. You see that in the plateauing 0:01:12.440 --> 0:01:14.679 of their rider base. You know, it's been stuck around 0:01:14.680 --> 0:01:18.200 twenty million for the past four quarters, and they had 0:01:18.200 --> 0:01:21.800 a CEO change. But in a nutshell, I think they 0:01:21.920 --> 0:01:24.800 really are struggling with that smaller scale that they have, 0:01:25.240 --> 0:01:28.119 so they don't have that driver additions on their platform 0:01:28.200 --> 0:01:29.920 to drive more incremental growth. 0:01:29.920 --> 0:01:32.920 But they were cutting costs right to hopefully increase ridership. 0:01:33.040 --> 0:01:35.000 Is any signs in this release, And. 0:01:35.160 --> 0:01:38.319 That's the problem with this business model is either you 0:01:38.440 --> 0:01:41.679 need scale or you need to keep offering subsidies to 0:01:41.800 --> 0:01:45.320 bring more riders, to bring more drivers on the platform. 0:01:45.360 --> 0:01:48.760 Even though it's an asset light model, you need those subsidies. 0:01:48.760 --> 0:01:52.920 And once you start pairing back subsidies, it hurts your frequency. 0:01:53.040 --> 0:01:55.880 That's what we're saying with the LIFT is the right 0:01:55.920 --> 0:01:57.400 frequency has just fallen off. 0:01:57.520 --> 0:01:58.800 So what does LIFT need to do? 0:02:00.080 --> 0:02:02.360 I think at this point, you know, it's a four 0:02:02.400 --> 0:02:07.600 billion dollar enterprise value company. I think all options are 0:02:07.640 --> 0:02:09.720 on the table. If I have to look at you know, 0:02:09.800 --> 0:02:13.680 any company looking to do last mile delivery beyond right sharing. 0:02:13.760 --> 0:02:18.160 Lift's biggest mistake was it never expanded beyond right sharing. 0:02:18.240 --> 0:02:22.040 In hindsight, everyone kept saying right sharing is more profitable 0:02:22.080 --> 0:02:25.240 than food delivery. But that was a mistake because that's 0:02:25.240 --> 0:02:29.000 what DoorDash did. They bought a company in Europe to 0:02:29.160 --> 0:02:32.679 expand internationally. They have you know, branched out and I 0:02:32.800 --> 0:02:36.480 started offering white gloves services, you know, storefront. So they 0:02:36.600 --> 0:02:41.000 really expanded into adjacent verticals whatever they could find door Dash. 0:02:41.280 --> 0:02:43.840 Same thing with Uber. They kept expanding even though they 0:02:43.840 --> 0:02:46.559 were not profitable, and they got a lot of criticism 0:02:46.840 --> 0:02:49.240 for doing it. That was the right thing to do 0:02:49.320 --> 0:02:52.840 because without scale, you just can't keep the marketplace up. 0:02:52.919 --> 0:02:55.440 Because I was thinking, I don't even think it's fair 0:02:55.520 --> 0:02:58.080 to almost compare Uber versus Lyft because it feels like 0:02:58.120 --> 0:03:00.000 they have very different business models. 0:03:00.480 --> 0:03:01.680 Is that the case? 0:03:02.240 --> 0:03:05.239 Well, or in just in terms about Uber kind of 0:03:05.320 --> 0:03:08.919 keeps expanding some of the services it's providing to those. 0:03:08.960 --> 0:03:14.680 Its, and they are all marketplaces. They're all marketplaces where 0:03:15.000 --> 0:03:18.960 you want to drive frequency by bringing more like the 0:03:19.000 --> 0:03:23.280 writers need to have something that drives them to open 0:03:23.320 --> 0:03:25.600 the app every day. And look, there are no switching 0:03:25.639 --> 0:03:28.400 costs in this business. If I find lower price on Uber, 0:03:28.480 --> 0:03:29.320 I'm going to take that. 0:03:29.440 --> 0:03:31.679 No loyalty either, no loyalty at all. 0:03:31.800 --> 0:03:34.800 So the way to drive prices lower is by scale. 0:03:34.840 --> 0:03:37.280 That's how you drive the et is down. That's how 0:03:37.320 --> 0:03:40.680 you organically build that frequency. 0:03:40.680 --> 0:03:41.840 Can I just say one of the cool things I 0:03:41.880 --> 0:03:44.080 feel like when like Uber, if you order something that 0:03:44.000 --> 0:03:46.400 that something's popping up. Hey, if you add this or 0:03:46.560 --> 0:03:48.080 you want to go to this place as well, you. 0:03:48.000 --> 0:03:48.440 Can do this. 0:03:48.560 --> 0:03:52.440 Like They're very clever trying to create or increase the 0:03:52.520 --> 0:03:54.840 velocity of your usage on the platform. 0:03:54.880 --> 0:03:57.600 Yeah. And look, they are layering on ads now, so 0:03:57.640 --> 0:04:00.680 if you're bros browsing through the Uber app, they're going 0:04:00.760 --> 0:04:04.360 to show you some ads. That's an incremental revenue lift. 0:04:04.360 --> 0:04:07.400 Can't do that because it's so transactional. And that too. 0:04:07.800 --> 0:04:10.960 You know, the monthly active user is stuck at twenty million, 0:04:11.240 --> 0:04:13.880 so they can grow that user base and that's where 0:04:14.040 --> 0:04:16.240 you can't even think of ads right now because you 0:04:16.279 --> 0:04:17.680 don't have enough frequency. Right. 0:04:17.839 --> 0:04:21.520 Can they win on competitive pricing? Because I hate doing 0:04:21.560 --> 0:04:24.599 the anecdotal evidence thing, But the only times that my 0:04:24.640 --> 0:04:26.760 friends are taking Lyft is when it's cheaper than Uber, 0:04:26.800 --> 0:04:30.240 which in New York City is pretty frequently it is. 0:04:30.320 --> 0:04:33.240 But I think what Uber has done well is they've 0:04:33.360 --> 0:04:37.760 created tiered pricing for you know, really attracting all kinds 0:04:37.800 --> 0:04:40.480 of users. So if you're if you care about price, 0:04:40.560 --> 0:04:42.920 you can find that kind of ride on Uber. If 0:04:42.960 --> 0:04:46.000 you want that convenience, you can find an expensive ride 0:04:46.040 --> 0:04:49.560 and shorter ETA. Lift just is struggling to keep that 0:04:49.680 --> 0:04:52.680 driver's supply on the platform, and that's why the ETAs 0:04:52.680 --> 0:04:55.560 are going up. So you know, the user experience won't 0:04:55.600 --> 0:04:57.680 be as good because people don't want to wait. If 0:04:57.720 --> 0:04:59.239 you're looking to take away. 0:04:59.279 --> 0:05:02.720 Time is higher, even if the ride time might be 0:05:02.760 --> 0:05:04.120 a little bit lower. 0:05:03.880 --> 0:05:07.479 And the price may be lower, but the waytime is higher. Well, right, 0:05:07.839 --> 0:05:08.760 you're not going to do that. 0:05:09.040 --> 0:05:10.880 And I have to say, I've got both on my platform, 0:05:10.920 --> 0:05:12.320 and a lot of times I'll be like, I'll compare 0:05:12.320 --> 0:05:15.720 prices and I don't find that lift is always less expensive, 0:05:16.040 --> 0:05:19.520 and so I automatically go in one direction. All right, 0:05:20.120 --> 0:05:24.479 new CEO, This was a big quarter for him. He's obviously, 0:05:24.560 --> 0:05:27.039 you know, cutting costs, he's doing different things. What does 0:05:27.080 --> 0:05:29.159 he need to do going forward? What do you want 0:05:29.160 --> 0:05:29.800 to hear from. 0:05:29.680 --> 0:05:31.240 Him from somebody who follows this company? 0:05:31.279 --> 0:05:34.279 A B too B partnership. He came from Amazon. Yeah, 0:05:34.400 --> 0:05:37.600 they need to drive that velocity and frequency. B two 0:05:37.640 --> 0:05:41.880 B partnership with Amazon Target, any of the retailers would 0:05:41.920 --> 0:05:44.839 give it. So Lift really needs to branch, right, Yeah. 0:05:44.720 --> 0:05:47.160 What like say hey, Target, we'll deliver like people can 0:05:47.240 --> 0:05:48.120 order and deliver for you. 0:05:48.440 --> 0:05:48.800 Yeah? 0:05:48.920 --> 0:05:49.240 Really? 0:05:49.320 --> 0:05:52.200 Yeah? I mean Shopify just got out of their delivery 0:05:52.200 --> 0:05:55.040 business this morning because that wasn't profitable. So you are 0:05:55.120 --> 0:05:58.279 finding there will be fewer companies that are left in 0:05:58.360 --> 0:06:00.680 terms of last mile delivery because they want to compete 0:06:00.680 --> 0:06:03.799 with Amazon, Right, that's your bed in terms of partnering 0:06:03.839 --> 0:06:06.200 with Amazon Amazon as opposed to competing. 0:06:06.480 --> 0:06:08.960 Is there is there an acquisition to that they should 0:06:09.000 --> 0:06:09.680 be making or no? 0:06:09.839 --> 0:06:10.919 Is it more about partnership? 0:06:11.000 --> 0:06:13.200 I think partnership. I mean, what's in it for Amazon 0:06:13.240 --> 0:06:16.360 to buy Lifts? So everyone is coming to them to 0:06:16.480 --> 0:06:20.799 partner and I think they won't want to out. Yeah, 0:06:20.880 --> 0:06:24.640 so I think partnership is probably better for Lyft and 0:06:25.000 --> 0:06:26.520 Amazon just has the network. 0:06:26.600 --> 0:06:27.960 Really that's so interesting. 0:06:28.120 --> 0:06:32.040 Do you have any big questions still that you are 0:06:32.080 --> 0:06:34.000 looking to get answered on any Ornane's call? 0:06:34.440 --> 0:06:34.680 Yeah? 0:06:35.000 --> 0:06:37.760 I think the key to me is what is he 0:06:37.880 --> 0:06:40.920 going to do beyond cost cutting? Really? I mean there 0:06:41.279 --> 0:06:43.000 is a lot you could argue you could do with 0:06:43.120 --> 0:06:46.839 last mile delivery because there are a number of areas 0:06:46.839 --> 0:06:49.760 and that's where you know, having a network is powerful. 0:06:49.839 --> 0:06:52.799 They have the data, but at this point of time, 0:06:52.920 --> 0:06:55.800 really they need to act fast in terms of driving 0:06:55.839 --> 0:06:59.920 that frequency because Uber really is taking share, and they're 0:07:00.200 --> 0:07:04.159 taking share without spending on incentives. So Lift's problem is 0:07:04.200 --> 0:07:07.240 their balance sheet. They're burning cash. They'll run out of 0:07:07.240 --> 0:07:09.440 cash if they keep burning two hundred three hundred million 0:07:09.480 --> 0:07:11.800 dollars a quarter. They just have one point five billion 0:07:11.840 --> 0:07:12.960 on the balance Is there. 0:07:12.920 --> 0:07:16.200 Room enough for two ride sharing services as their core 0:07:16.280 --> 0:07:18.880 business meaning Uber and Lyft, and one where Lift can 0:07:18.920 --> 0:07:24.320 actually grow substantially in terms of market cap, revenues and share. 0:07:24.440 --> 0:07:27.080 I think, I mean, I would say, yes, this market 0:07:27.120 --> 0:07:29.920 could be a duopoly, but I would argue they will 0:07:29.960 --> 0:07:33.560 be more valued as logistics companies going forward as opposed 0:07:33.600 --> 0:07:36.480 to tech companies because the market is so fixated on 0:07:36.560 --> 0:07:41.040 profitability and you know, running things without burning cash. That's 0:07:41.120 --> 0:07:43.960 why it's a little tricky for Lyft given its smaller size. 0:07:44.040 --> 0:07:47.800 You're saying like logistics meaning delivery, that is wild? 0:07:47.960 --> 0:07:48.240 Love it? 0:07:48.760 --> 0:07:49.720 So that's wild. 0:07:49.880 --> 0:07:52.960 Okay, good stuff, Thank you so much. Always man Deep 0:07:53.000 --> 0:07:56.480 saying he is our Bloomberg Intelligence senior tech industry analyst 0:07:57.120 --> 0:07:59.880 here in studio, looking at shares of Lyft off there 0:08:00.280 --> 0:08:03.000 but still down about ten percent here in the aftermarket 0:08:03.280 --> 0:08:05.200 following their update on earnings. 0:08:05.240 --> 0:08:06.480 This is Bloomberg Radio. 0:08:07.280 --> 0:08:10.840 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:10.880 --> 0:08:14.320 live weekday afternoons from three to six Eastern Listen. 0:08:14.120 --> 0:08:17.040 On Bloomberg dot com, the iHeartRadio app. 0:08:16.840 --> 0:08:20.960 And the Bloomberg Business app, or watch us live on YouTube. 0:08:21.760 --> 0:08:24.960 We are waiting those earnings out from Apple doing about 0:08:25.040 --> 0:08:26.680 six minutes time, so as soon as they cross the 0:08:26.720 --> 0:08:29.560 Bloomberg terminal, we will certainly bring them to you. In 0:08:29.600 --> 0:08:32.400 the meantime, we do want to check in with Dan Morgan. 0:08:32.400 --> 0:08:34.440 He's going to be here with us when those results 0:08:34.520 --> 0:08:36.800 come out. Dan, of course, you know a friend of 0:08:36.800 --> 0:08:39.679 the show, senior portfolio manager over at Sonova's trust company. 0:08:39.880 --> 0:08:42.440 They've got roughly just shy of twenty two billion in 0:08:42.480 --> 0:08:45.560 acids under management. Dan with us once again out of Atlanta, 0:08:45.679 --> 0:08:48.679 joining us on the phone. Excuse me, Dan, We are 0:08:48.760 --> 0:08:54.000 waiting Apple's earnings a little tickle here, so what we 0:08:54.080 --> 0:08:56.360 wait for that? I do want to ask you about 0:08:56.520 --> 0:09:01.520 Qualcom because this dock down the most since November of 0:09:01.600 --> 0:09:04.480 twenty twenty two, but we did see this stock trading 0:09:04.559 --> 0:09:06.360 off about five and a half percent. 0:09:06.400 --> 0:09:06.800 There was some. 0:09:06.800 --> 0:09:11.160 Disappointment over the results. I'm curious they came out with 0:09:11.200 --> 0:09:14.880 a forecast that really indicated the smartphone slump that we 0:09:14.920 --> 0:09:16.920 have been seeing is going to drag on. What was 0:09:16.960 --> 0:09:19.120 your take on Qualcom specifically. 0:09:19.040 --> 0:09:22.920 Well, Hi, Carol High Medicine. Yeah, it was obviously this 0:09:22.960 --> 0:09:24.960 isn't a good way to kick off to get ready 0:09:24.960 --> 0:09:28.720 for the Apple report, right because we know that Qualcomm, 0:09:28.760 --> 0:09:31.280 we've talked about them in the past, they about twenty 0:09:31.280 --> 0:09:34.439 five percent of their sales go into chipsets that they 0:09:34.480 --> 0:09:37.559 make that go into the modems for the iPhones. And 0:09:37.640 --> 0:09:41.520 what really was kind of disturbing was the QCT, which 0:09:41.559 --> 0:09:47.400 is their chipset division, which makes the CDMA based chips 0:09:47.440 --> 0:09:51.440 that they sell. Their guidance going into the upcoming third 0:09:51.520 --> 0:09:54.160 quarter was pretty shy of what the street was looking for. 0:09:54.280 --> 0:09:57.880 So the guidance was six point nine to seven point 0:09:57.920 --> 0:10:00.720 five billion, the street was at seven point eight. So 0:10:00.800 --> 0:10:05.160 that gives us a kind of preliminary indication that sales 0:10:05.200 --> 0:10:08.959 have been weaker than anticipated in terms of drawdowns of inventories, 0:10:09.520 --> 0:10:13.640 especially in that chipset segment which does sell directly into Apple. 0:10:13.800 --> 0:10:16.319 So we don't know, Carol and Madison, if this is 0:10:16.400 --> 0:10:18.760 kind of a ripple effect of what we're going to 0:10:18.760 --> 0:10:20.240 get here in a minute, which is going to be 0:10:20.280 --> 0:10:24.760 the second quarter Apple results rolling into this Qualcom report 0:10:24.760 --> 0:10:26.240 that we're getting, you know, a little bit ahead of 0:10:26.240 --> 0:10:28.440 the results hitting the tape on Apple. 0:10:28.880 --> 0:10:30.840 Can I talk to you about Apple then? Since you 0:10:30.880 --> 0:10:33.360 bring it up, Daniel, I mean, I wonder to what 0:10:33.480 --> 0:10:37.240 extent you've heard of investor concern that you know, all 0:10:37.280 --> 0:10:40.760 these buybacks can be used to hedge against slowing iPhone 0:10:40.800 --> 0:10:44.600 production because you know what's the longevity of that of 0:10:44.600 --> 0:10:45.160 that move? 0:10:46.200 --> 0:10:48.880 Well, Madison, you're giving up all Apple secrets here. So 0:10:49.480 --> 0:10:53.040 whenever the stock linguishes, this is historically speaking, and when 0:10:53.080 --> 0:10:57.040 iPhone revenues are flat and the other hardware categories are struggling, 0:10:57.640 --> 0:10:59.880 Apple has the ability, as you know, they have about 0:11:00.000 --> 0:11:02.600 one hundred and sixty five billion in cash to go 0:11:02.720 --> 0:11:05.400 out and increase their dividend. Matter of fact, they're supposed 0:11:05.400 --> 0:11:07.760 to increase it on this upcoming second quarter to about 0:11:07.840 --> 0:11:11.480 ninety eight cents a share and increase their share repurchase program. 0:11:11.559 --> 0:11:14.040 They're expected to grow that from four hundred and five 0:11:14.040 --> 0:11:16.400 billion to four hundred and ninety five billion. So, as 0:11:16.400 --> 0:11:19.240 your listeners know, if you're able to increase your dividend 0:11:19.640 --> 0:11:22.720 and lower the number of shares in your denominator of 0:11:22.760 --> 0:11:26.640 your EPs calculation, you're able to grow earnings on basically 0:11:26.679 --> 0:11:29.040 flat growth. And they've done that in the past. They've 0:11:29.080 --> 0:11:31.640 done a lot of financial engineering. They've split their stock 0:11:31.720 --> 0:11:34.920 like they did back in twenty fourteen. Everybody went crazy 0:11:34.960 --> 0:11:39.080 for it. So you're right, Madison, if these earnings act good, 0:11:39.120 --> 0:11:41.360 they'll just come out and announce all this great things 0:11:41.360 --> 0:11:42.880 they're going to do with all that cash they have 0:11:42.960 --> 0:11:43.880 sitting in the balance sheet. 0:11:44.120 --> 0:11:44.520 All right. 0:11:44.640 --> 0:11:47.960 So, having said that, if you look at what the 0:11:48.000 --> 0:11:51.120 stock has done ahead of earnings, DAN, it's up more 0:11:51.120 --> 0:11:53.199 than twenty seven percent year to date. Is that perform 0:11:53.240 --> 0:11:54.439 the Nasdaq one hundred? 0:11:54.960 --> 0:11:55.200 You know? 0:11:55.240 --> 0:11:56.319 But if you do look. 0:11:56.120 --> 0:11:58.679 At what we got from Microsoft and Meta, the bar 0:11:58.800 --> 0:12:01.720 is pretty high for APP. And I do think about 0:12:01.760 --> 0:12:05.360 any kind of disappointment, you know, causing a major reset 0:12:05.360 --> 0:12:07.560 in terms of what investors are really willing to pay 0:12:07.640 --> 0:12:08.680 up for this name right now? 0:12:09.440 --> 0:12:11.840 Yeah, I think what's happening, Carol is that we expect 0:12:11.840 --> 0:12:15.320 this second quarter to be basically flatted down. We expect 0:12:15.400 --> 0:12:18.000 guidance and their upcoming third quarter twenty three to be 0:12:18.040 --> 0:12:22.240 slightly down. But everyone's looking ahead, right We're looking six months, 0:12:22.400 --> 0:12:25.160 nine months ahead, and the glass seems kind of half 0:12:25.200 --> 0:12:27.960 full at this time. And you know, everyone's looking for, 0:12:28.320 --> 0:12:31.000 you know, these catalysts going forward, and that is you 0:12:31.040 --> 0:12:33.240 always want to buy Apple stock six to nine months 0:12:33.280 --> 0:12:35.280 ahead of a product launch. We know that the iPhone 0:12:35.360 --> 0:12:38.319 fifteen is scheduled for September. They're also going to be 0:12:38.400 --> 0:12:41.800 coming out, as you talked about before, a new virtual 0:12:41.840 --> 0:12:45.520 reality headset that's going to compete directly against Meta. There's 0:12:45.559 --> 0:12:49.240 also enthusiasm about the installation base continuing to grow. They 0:12:49.240 --> 0:12:52.080 have two billion users one point five billion users on 0:12:52.120 --> 0:12:54.520 the iPhone. Of course they can harvest that through their 0:12:54.559 --> 0:12:57.880 service revenue, right, that's how they monetize all these users. 0:12:57.880 --> 0:13:00.760 So that's how the glass looks half full right now. 0:13:00.920 --> 0:13:04.520 I think Right now, guys, everyone's looking ahead. Everyone's thinking, Okay, 0:13:04.559 --> 0:13:06.480 we know this server is not good, but wait, it's 0:13:06.480 --> 0:13:07.959 going to be good in September. 0:13:08.000 --> 0:13:10.160 Well it looks like just about a minute, yeah, right, 0:13:10.240 --> 0:13:12.640 exactly what are you going to do for me in 0:13:12.640 --> 0:13:14.439 the future. So about a minute before we get to 0:13:14.480 --> 0:13:17.160 Apple earnings, we're just watching the bloomberg for when they cross. 0:13:17.440 --> 0:13:19.400 But Dan, one thing I did want to ask you AMD. 0:13:19.640 --> 0:13:21.559 We saw that stock up more than six percent in 0:13:21.559 --> 0:13:24.480 today's session, twelve percent higher at its best levels of 0:13:24.520 --> 0:13:28.600 the day, but Microsoft helping finance AMD's expansion into AI 0:13:28.720 --> 0:13:32.200 processors as we wait those Apples results. Significance of that 0:13:32.280 --> 0:13:34.480 news because it certainly seemed to give a little bit 0:13:34.480 --> 0:13:36.480 of a pop two shares of AMD today. 0:13:37.120 --> 0:13:41.200 What's interesting, Carol Madison, as AMD is always behind Intel, 0:13:41.320 --> 0:13:44.120 and it seemed now that they have just been ahead 0:13:44.120 --> 0:13:46.960 of the game in terms of bringing chipsets to the 0:13:46.960 --> 0:13:49.520 market to get ahead of Intel on some offerings that 0:13:49.520 --> 0:13:52.120 they've been delayed on, and this is just another feather 0:13:52.200 --> 0:13:54.880 in their cap in terms of what they've been able 0:13:54.880 --> 0:13:56.920 to do, and not only in data center and servers, 0:13:56.960 --> 0:14:00.680 but also in the CPO space for PCs. So things 0:14:00.720 --> 0:14:03.199 really going well for them. Obviously there's a downturn in 0:14:03.200 --> 0:14:06.200 the PC unit volume sector right now in terms of 0:14:06.240 --> 0:14:10.120 buying PCs after the COVID splurge, but I think AMD 0:14:10.320 --> 0:14:12.480 is much better position now than they ever been. I'n't 0:14:12.480 --> 0:14:14.080 following the company for almost thirty years. 0:14:14.160 --> 0:14:17.959 But the idea that Microsoft is lending a hand and 0:14:18.000 --> 0:14:21.000 that connection and we know Microsoft sent you know, the 0:14:21.000 --> 0:14:24.000 world on fire, you know, with its its deal into 0:14:24.080 --> 0:14:29.800 Chatchipt specifically, so that combination and partnership big deal. 0:14:30.560 --> 0:14:32.680 Well, you know it's a big deal, Carol Madison, is 0:14:32.680 --> 0:14:36.240 that in the past, Microsoft would write directly to the 0:14:36.560 --> 0:14:37.280 l microprocess. 0:14:37.560 --> 0:14:40.440 You've got the numbers, yep, let's get to it, Apple crossing. 0:14:40.840 --> 0:14:44.480 Let's get to second quarter EPs a dollar fifty two, folks, 0:14:44.480 --> 0:14:47.600 that's nine cents better than what the street was expecting. 0:14:47.680 --> 0:14:50.960 I'm looking for the second quarter revenue in total ninety 0:14:50.960 --> 0:14:53.360 four point eighty four billion. That too, is a beat. 0:14:53.400 --> 0:14:56.960 The estimate was for ninety two point six billion dollars. 0:14:57.000 --> 0:14:59.520 So again that's our red sticky. So that's a highlight. 0:14:59.600 --> 0:15:02.960 That stopp is up about three percent in the after hours. Madison, 0:15:03.000 --> 0:15:05.600 you asked about buybacks. Apple to buy back up to 0:15:05.640 --> 0:15:09.720 an additional ninety billion dollars in shares and raising its 0:15:09.800 --> 0:15:13.000 quarterly dividend four point three percent to twenty four cents 0:15:13.000 --> 0:15:16.160 a share. So that is a big kick to the upside. 0:15:16.160 --> 0:15:18.320 Again in the stock up about two percent in the 0:15:18.320 --> 0:15:22.440 after market. Let's go through some of the segments. Second 0:15:22.520 --> 0:15:25.840 quarter service revenue twenty point ninety one billion, that's a 0:15:25.840 --> 0:15:26.480 slight miss. 0:15:26.640 --> 0:15:27.600 Twenty one point. 0:15:27.360 --> 0:15:32.720 Eleven billion, that was the estimate among analysts. iPhone revenue 0:15:32.920 --> 0:15:35.560 fifty one point thirty three billion, that's a beat the 0:15:35.680 --> 0:15:38.320 estimate on the street forty eight point ninety seven billion. 0:15:38.720 --> 0:15:42.680 Greater China revenue seventeen point eighty one billion. That two 0:15:42.760 --> 0:15:46.400 is a slight beat of seventeen point sixteen billion. Second 0:15:46.480 --> 0:15:50.560 quarter MAC revenue seven point seventeen billion, a slight miss. 0:15:50.760 --> 0:15:54.560 The estimate was seven point seventy four billion. iPad revenue 0:15:54.800 --> 0:15:57.440 that was pretty much in line. Six point sixty seven billion, 0:15:57.440 --> 0:16:00.120 the estimate was six point sixty nine billion. Then you 0:16:00.200 --> 0:16:03.840 had wearables, home and accessories eight point seventy six billion. 0:16:03.920 --> 0:16:06.560 The estimate was for eight point fifty one Again, the 0:16:06.560 --> 0:16:08.320 stock is up about one and a half percent in 0:16:08.360 --> 0:16:11.640 the aftermarket. Dan initial thoughts. 0:16:11.440 --> 0:16:13.360 Well, obviously, the big numbers that stand out to me 0:16:13.480 --> 0:16:16.440 Carol and Madison is this huge beat in iPhone revenue, 0:16:16.440 --> 0:16:19.320 because coming in this quarter, I had forty eight point 0:16:19.400 --> 0:16:21.600 ninety seven that came into fifty one point three and 0:16:21.640 --> 0:16:23.960 that forty eight point nine seven would have represented a 0:16:24.000 --> 0:16:27.120 negative growth rate of about three point two percent. This 0:16:27.160 --> 0:16:29.320 is going to put them, I think, probably flatter, even 0:16:29.360 --> 0:16:31.560 slightly up on iPhone revenue. I was looking for about 0:16:31.560 --> 0:16:34.680 fifty five million units, so that's a huge number for them. 0:16:34.960 --> 0:16:37.000 A little bit of a miss you mentioned, Carol on 0:16:37.040 --> 0:16:38.960 the service revenue, that's a little bit of a surprise. 0:16:39.280 --> 0:16:41.720 That's probably about a six percent growth rate. And then 0:16:41.720 --> 0:16:43.480 it's kind of a little bit of a mosh pit here, 0:16:44.360 --> 0:16:47.479 you know, Max missed, but kind of in line with iPads, 0:16:47.680 --> 0:16:49.520 you know, it's kind of a wash out. But I 0:16:49.520 --> 0:16:51.520 think the street's going to zero in, not only on 0:16:51.520 --> 0:16:54.440 that top line number terms of revenues. That was a 0:16:54.480 --> 0:16:57.320 huge beat, was it ninety four point eight versus ninety 0:16:57.320 --> 0:16:59.840 two point six? And a good beat on EPs, but 0:17:00.000 --> 0:17:03.480 that iPhone revenue is a bit of surprise. Guys, after 0:17:03.560 --> 0:17:05.480 we got that Qualcom number, right, we were kind of 0:17:05.480 --> 0:17:07.880 worried about that, but it looks like they were able 0:17:07.880 --> 0:17:10.240 to piece things together and put together a really strong quarter. 0:17:10.960 --> 0:17:16.080 Well, they also expected they had a three percent decline 0:17:16.080 --> 0:17:19.800 in revenue, which I'm sorry. The revenue number came in 0:17:19.880 --> 0:17:22.120 down three percent year over a year, which was better 0:17:22.160 --> 0:17:26.720 than analyst expectations, but that's still revenue down, Daniels, So 0:17:26.760 --> 0:17:29.040 I wonder if you can talk a little bit about 0:17:29.720 --> 0:17:32.120 the impact of that and whether or not you see 0:17:32.160 --> 0:17:33.360 that as a win or a miss for. 0:17:33.320 --> 0:17:37.320 Apple, Well, Madison, as we said before this quarter and 0:17:37.400 --> 0:17:41.080 next quarter, we're expecting slightly negative growth, so it's not 0:17:41.200 --> 0:17:43.800 too big of surprise. Even though they beat estimates, it 0:17:43.880 --> 0:17:48.080 was a negative number. Again, if you were to look 0:17:48.119 --> 0:17:50.840 at some of these other Fang stocks that reported earlier 0:17:50.920 --> 0:17:53.840 last week, it was a very similar type of environment, 0:17:53.880 --> 0:17:56.240 right It was kind of slightly up or slightly down. 0:17:56.359 --> 0:17:59.640 No one huge number beats, you know. I think Amazon 0:17:59.680 --> 0:18:01.840 got it five to ten percent top line growth in 0:18:01.880 --> 0:18:04.760 the next quarter, but we're all in single digit territory 0:18:04.840 --> 0:18:07.520 right now. Unfortunately, with the Fang stocks either plus or 0:18:07.560 --> 0:18:09.119 minus at this point. 0:18:09.720 --> 0:18:12.159 Well, and again we continue to see Apple shares in 0:18:12.200 --> 0:18:16.359 the aftermarket falling their latest update up just about two percent. Here, 0:18:16.520 --> 0:18:19.480 I'm looking at the press release Dan and Tim Cook, 0:18:19.480 --> 0:18:22.120 Apple CEO, of course, saying we are pleased to report 0:18:22.160 --> 0:18:24.560 an all time record and services and a March quarter 0:18:24.600 --> 0:18:29.040 record for iPhone despite the challenging macro economic environment and 0:18:29.080 --> 0:18:31.640 to have our installed base of active devices reach an 0:18:31.680 --> 0:18:34.520 all time high. We continue to invest for the long 0:18:34.600 --> 0:18:37.920 term lead with our values, including making major progress toward 0:18:38.000 --> 0:18:42.280 building carbon neutral products and supply chains by twenty thirty. 0:18:42.320 --> 0:18:44.800 And then they did say that, you know, given our 0:18:44.840 --> 0:18:47.159 confidence in Apple's future and the value we see in 0:18:47.200 --> 0:18:50.000 our stock, our board is author raised an additional ninety 0:18:50.000 --> 0:18:52.760 billion for share repurchases and then of course raising their 0:18:52.840 --> 0:18:56.359 quarterly dividend for the eleventh year in a row. Commentary 0:18:56.400 --> 0:19:00.720 seems pretty pretty safe, if you will. The macroeconomic challenges 0:19:01.119 --> 0:19:02.720 just gives us some idea and clarity. 0:19:03.280 --> 0:19:04.520 What is it that you want to know on the 0:19:04.520 --> 0:19:05.119 call today? 0:19:06.160 --> 0:19:08.160 Well, what is the best way to jump your stock 0:19:08.200 --> 0:19:12.520 price up? In Fangland talk about AI? So I would 0:19:12.600 --> 0:19:15.480 expect them to talk a little bit about their initiative 0:19:15.480 --> 0:19:17.479 and AI. So far, they've been a little bit quiet 0:19:18.119 --> 0:19:20.640 compared to Microsoft and some of the other Fang stocks. 0:19:20.920 --> 0:19:22.960 We know that their initiative is going to be using 0:19:23.000 --> 0:19:28.840 the phone as the apparatus to get you use artificial intelligence, 0:19:29.000 --> 0:19:32.560