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The Leap Week: Did Apple Really Have a Record Quarter? (lapcatsoftware.com) 53

An anonymous reader shares a blog post: Apple stated that Q1 FY2017 was an all-time record for quarterly revenue. The media dutifully and mostly uncritically spread this "great" news for Apple. Technically the claim is true, the revenue was an all-time record. True but misleading. Although Apple didn't lie as such, you might say there was a sin of omission, and a definite spin of the facts. Most Apple fiscal quarters are 13 weeks long. Once in a while, however, they need a 14 week quarter. You might call it a "leap quarter". There was a good explanation of this financial practice a few years ago in Slate. Apple's Q1 2017 was a 14 week quarter, for the first time since Q1 2013. John Gruber writes at DaringFireball, "Adjusted for the extra week, Apple actually had another down quarter."
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The Leap Week: Did Apple Really Have a Record Quarter?

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  • Of course (Score:5, Informative)

    by aaarrrgggh ( 9205 ) on Monday February 06, 2017 @11:28AM (#53811841)
    Anyone that watches Apple knows this, and it isn't that big of a deal. Next year they will be penalized by IT in the same vein.

    It really doesn't say much though, unless you assume revenue was flat for the quarter. Christmas being on (iirc) a Thursday actually has a bigger impact as the "holiday season" is longer. Considering the discount Apple is at in the market compared to MS, GOOG, FB, CRM, it was a "record" quarter. Most of those companies also end their fiscal year on the last Saturday of the year.
    • So the quarter before the last quarter was shorter than average but I didn't see any articles saying that was misleading because it was a short quarter. No this is only brought up when the newas sounds good.

      In reality what's being argues about here is the rate of growth of the rate of income. a second derivative. Apple's trend is actually growing in revenue steadily steadily.

      • by Anonymous Coward

        So the quarter before the last quarter was shorter than average but I didn't see any articles saying that was misleading because it was a short quarter.

        Was it a short quarter? TFS makes it sound like most quarters are 13 weeks, with an occasional 14 week quarter. In order for it to be a short quarter, it would need to have been less than 13 weeks.

        I still agree that these people are grasping at straws in order to hate on Apple, but I don't really understand your logic.

      • So the quarter before the last quarter was shorter than average but I didn't see any articles saying that was misleading because it was a short quarter. No this is only brought up when the newas sounds good.

        In reality what's being argues about here is the rate of growth of the rate of income. a second derivative. Apple's trend is actually growing in revenue steadily steadily.

        Exactly. If you stand back a little ways, the "jaggies" start to blur together, and you start seeing the "Trend" a lot easier. And, overall, Apple's "trend" looks a LOT healthier [statista.com] than say, Microsoft's [statista.com]...

    • Re:Of course (Score:5, Informative)

      by Anubis IV ( 1279820 ) on Monday February 06, 2017 @11:54AM (#53812043)

      Anyone that watches Apple knows this, and it isn't that big of a deal. Next year they will be penalized by IT in the same vein.

      Exactly. Next year they'll have that much further to have to go if they don't want to report a down quarter, so it's of virtually no net-benefit to them.

      That said, it is of interest that the last few times they've had a 14-week quarter, they've mentioned it right at the start of their briefing in order to set expectations, whereas there was no mention of it this time. I don't think they were trying to hide anything, but I don't think they were doing the media any favors. In fact, I'd wager that they were trying to let the media jump to the obvious conclusions so that they might benefit from a short-term reversal in the narrative that's been playing out.

      Of course, it's also questionable whether or not they even would have had a down quarter had it been a 13-week quarter, given the positioning of Christmas within the quarter. The summary pulled just the "had another down quarter" portion from DaringFireball's comments [daringfireball.net], but the original quote actually continued on with:

      I don’t think it’s quite right to ding the quarter by a full 8 percent — the entire last week started with Christmas day — but surely some sort of correction is necessary for year-over-year comparisons.

      Ideally, we'd consider the last 13 weeks of the year, eliminating the first week from their 14-week quarter. Unfortunately, Apple doesn't break the numbers down so we can do that, which means our best approximation is to knock their numbers down by 1/14th. Doing that, however, results in us giving as much weight to their first week—which was likely their weakest—as we give Christmas week, thus unfairly punishing them for having a longer quarter. Obviously, that would result in a greater downward shift than is warranted.

      • No, it's probably a down quarter for 13W, because many people shop on the sales directly after x-mas or get promised a cell phone at x-mas and buy it afterward because they don't know the color they'd like or something like that.

        Oh well... :)

        • No, it's probably a down quarter for 13W, because many people shop on the sales directly after x-mas or get promised a cell phone at x-mas and buy it afterward because they don't know the color they'd like or something like that.

          The post-Christmas week is always part of their fourth quarter financials, so it makes no sense to remove it from consideration like you're suggesting we do.

  • Old News (Score:5, Informative)

    by ghoul ( 157158 ) on Monday February 06, 2017 @11:28AM (#53811847)

    Already been discussed on Slashdot day of earnings release Fudging the Math [slashdot.org]

  • >> Did Apple Really Have a Record Quarter?

    Slow news day? How about something that nerds might care about. We all know Apple is coasting (and the stock price will gradually decline), but unless someone's started a Kickstarter to acquire Macbook from Apple's disinterested management team, then how 'bout saving the front page space for something that...er...matters?
    • Tech company finances don't matter to nerds (who probably in sum hold billions of dollars in tech company stock)?

      Or are you just a generic Apple hater?

      • >> company finances don't matter to nerds (who...hold...company stock)

        In additional to Apple, also hold own a bunch of stock in GM, Exxon, and other random companies. But I don't need to hear about their quarterly earnings on Slashdot - there are plenty of other outlets that do a hell of a better job of that.
      • Most nerds I know given RSUs from their employers, including nerds who work at Apple, sell their company stock pretty much as soon as it vests. The logic, which I don't argue with, is that by being employees they already have far too many eggs in that one basket. Given that most RSUs given to employees in every company vest over a 4 year period, that basket is pretty fucking heavy already.

        There's no real narrative to lock on to here, sell it and diversify, if your company tanks and you get laid off, you wi

        • My dad retired about a decade ago. His company stock was ~70% of his portfolio.

          He lives off dividends (VERYnicely) AND the stock has grown more than anything else in his portfolio over that time. About 2x the S&P 500. He's literally wealthier now than when he retired.

          He tells his financial advisor to ignore his company stock and just help manage the rest of it.

  • by Anonymous Coward

    Apple addressed the 13 week vs 14 week difference head-on in the conference call:

    We had the benefit of a 14th week during the quarter this year, but this was offset by four factors. First, this year we grew China inventory significantly less than a year ago. Second, iPhone 7 launched earlier in the September quarter compared to the iPhone 6s launch the previous year, creating a more difficult comparison for the December quarter this year. Third, the stronger U.S. dollar affected total revenue growth this ye

    • Or, to put it another way, the apparent quarter-on-quarter growth that they were happy to see trumpeted in all the headlines was less than the "measurement error" due to the way the figures were calculated. (As, to be fair, is any quarter-on-quarter decrease of the same size). So, a flat quarter then...

      Of course, for a quarter during which Apple's main competitor in the phone market (Samsung) had to withdraw their new flagship phone, Apple's iPhone 7 (a completely new phone c.f. last year's 6s spec bump) h

  • by PortHaven ( 242123 ) on Monday February 06, 2017 @12:08PM (#53812155) Homepage

    So when you combine an extra week, in combination with a quarter in which your #1 rival fails to deliver their competing phone leaving a gap in the 2.5 year upgrade pattern. Yup...

    The quarter that the Samsung S8/Note 8 arrive will be much different and more realistic.

    • by Anonymous Coward

      I'm sure it will explode onto the scene.

  • ... anything from this, while Apple keeps stockpiling money in remote tax evasion havens.
  • Its not a down quarter... Just alternative facts

We can predict everything, except the future.

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