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Meta's Earnings Send Shares Plummeting. It's More Bad News for Big Tech

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href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$&nbsp;</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$&nbsp;</a><v-v 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20:55","market":"us","language":"en","title":"Meta's Earnings Send Shares Plummeting. It's More Bad News for Big Tech","url":"https://stock-news.laohu8.com/highlight/detail?id=1178169124","media":"Barron's","summary":"Meta Platforms shares were getting pummeled following the company’s disappointing third-quarter earn","content":"<html><head></head><body><p>Meta Platforms shares were getting pummeled following the company’s disappointing third-quarter earnings announcement, as a weak advertising environment took a toll on the social media giant.</p><p>The stock market carnage suggests that Wall Street is running out of patience with Meta’s (ticker: META) corporate strategy. Investors are clearly dismayed by the company’s plans to aggressively boost spending on the metaverse and other projects in 2023.</p><p>The disappointing results from the parent of Facebook, Instagram, and WhatsApp makes three straight weak earnings reports from the tech megacaps, followingresultson Tuesday from both Microsoft (MSFT) and Alphabet (GOOGL). Amazon (AMZN) and Apple (AAPL) report Thursday afternoon.</p><p>Meta posted revenue of $27.7 billion for its third quarter, down 4% from a year ago, up about 2% in constant currency, and essentially in line with Street forecasts. Meta’s guidance had called for revenue of between $26 billion and $28.5 billion. Meta earned $1.64 a share in the quarter, falling well shy of Street consensus at $1.90 a share.</p><p>“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” CEO Mark Zuckerberg said in a statement. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”</p><p>The stock slid throughout the afternoon, accelerating during the company’s earnings conference call as Meta provided little comfort to investors about the outlook. As the call neared completion, the stock was down 22% in premarket trading Thursday.</p><p>This has been a rough year for Meta and the company’s shareholders. There is new competition from TikTok and others. There are ongoing ad-targeting issues tied to Apple’s renewed focus on privacy protections for iPhone users as well as disappointing monetization for Reels—all amid the softening global economy. And investors remain largely skeptical about prospects for the metaverse.</p><p>The third-quarter results will do nothing to improve the market’s assessment of the stock, which now has declined about 70% since its November 2021 peak. Among other things, Zuckerberg showed no signs of backing away from the company’s aggressive investment plans for the Metaverse. And there seems to be no sign of improvement in the company’s core advertising business.</p><p>Meta’s outlook for the December quarter calls for revenue of $30 billion to $32.5 billion, at the midpoint of that range it is well short of the Street consensus forecast of $32.4 billion.</p><p>The company said in its earnings press release that it is “making some significant changes” to operate more efficiently, and will hold some teams flat in 2023 in terms of head count, while shrinking others. Meta says it expects 2023 year-end head count to be about flat with Q3 2022 levels.</p><p>Meta now expects 2022 total expenses to be in the $85 billion to $87 billion range, a slight tweak from its previous forecast for $85 billion to $88 billion; the new range includes $900 million in charges for consolidating office facilities.</p><p>Meta projects 2023 expenses in the range of $96 billion to $101 billion, including $2 billion in office consolidation charges. At the midpoint of the range, that would be a 15% hike in expenses. That forecast is likely one reason the stock is getting pummeled—investors have been urging Meta to slash spending.</p><p>In an open letter to CEO Mark Zuckerberg and the Meta board earlier this week, Altimeter Capital COE Brad Gerstner urged Meta to cut staff by 20%, reduce capital spending by $5 billion a year and cap spending on the metaverse to no more than $5 billion annually. Meta doesn’t appear to be following his advice.</p><p>Meta said it expects operating losses from its Reality Labs unit, which include virtual reality headsets and development of the metaverse, to “grow significantly year over year” in 2023. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” the company said.</p><p>In the quarter, Meta lost $3.7 billion in the Reality Labs unit. The “family of apps” segment—the core social media business—had income from operations of $9.3 billion. Advertising revenue in the quarter was $27.2 billion, down 3.6% from a year earlier.</p><p>Meta said it expects capital spending of $32 billion to $33 billion this year, and $34 billion to $39 billion next year, “driven by our investments in data centers, servers, and network infrastructure.” The range is well above the Street consensus forecast for capital spending for 2023 of $29 billion. The company added that “an increase in AI capacity is driving substantially all of our capital expenditure growth in 2023.”</p><p>On the news, shares of companies viewed as likely beneficiaries of the company’s aggressive spending plan soared in premarket trading Thursday, with Arista Networks(ANET) up 9.1%, Nvidia (NVDA) up 4.9% and Advanced Micro Devices (AMD) up 2.8%.</p></body></html>","source":"lsy1610680873436","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Meta's Earnings Send Shares Plummeting. 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It's More Bad News for Big Tech\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-10-27 20:55 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/meta-facebook-earnings-stock-price-51666735047?mod=hp_LATEST><strong>Barron's</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Meta Platforms shares were getting pummeled following the company’s disappointing third-quarter earnings announcement, as a weak advertising environment took a toll on the social media giant.The stock...</p>\n\n<a href=\"https://www.barrons.com/articles/meta-facebook-earnings-stock-price-51666735047?mod=hp_LATEST\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"META":"Meta Platforms","NVDA":"英伟达","AMD":"美国超微公司","AAPL":"苹果"},"source_url":"https://www.barrons.com/articles/meta-facebook-earnings-stock-price-51666735047?mod=hp_LATEST","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1178169124","content_text":"Meta Platforms shares were getting pummeled following the company’s disappointing third-quarter earnings announcement, as a weak advertising environment took a toll on the social media giant.The stock market carnage suggests that Wall Street is running out of patience with Meta’s (ticker: META) corporate strategy. Investors are clearly dismayed by the company’s plans to aggressively boost spending on the metaverse and other projects in 2023.The disappointing results from the parent of Facebook, Instagram, and WhatsApp makes three straight weak earnings reports from the tech megacaps, followingresultson Tuesday from both Microsoft (MSFT) and Alphabet (GOOGL). Amazon (AMZN) and Apple (AAPL) report Thursday afternoon.Meta posted revenue of $27.7 billion for its third quarter, down 4% from a year ago, up about 2% in constant currency, and essentially in line with Street forecasts. Meta’s guidance had called for revenue of between $26 billion and $28.5 billion. Meta earned $1.64 a share in the quarter, falling well shy of Street consensus at $1.90 a share.“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” CEO Mark Zuckerberg said in a statement. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”The stock slid throughout the afternoon, accelerating during the company’s earnings conference call as Meta provided little comfort to investors about the outlook. As the call neared completion, the stock was down 22% in premarket trading Thursday.This has been a rough year for Meta and the company’s shareholders. There is new competition from TikTok and others. There are ongoing ad-targeting issues tied to Apple’s renewed focus on privacy protections for iPhone users as well as disappointing monetization for Reels—all amid the softening global economy. And investors remain largely skeptical about prospects for the metaverse.The third-quarter results will do nothing to improve the market’s assessment of the stock, which now has declined about 70% since its November 2021 peak. Among other things, Zuckerberg showed no signs of backing away from the company’s aggressive investment plans for the Metaverse. And there seems to be no sign of improvement in the company’s core advertising business.Meta’s outlook for the December quarter calls for revenue of $30 billion to $32.5 billion, at the midpoint of that range it is well short of the Street consensus forecast of $32.4 billion.The company said in its earnings press release that it is “making some significant changes” to operate more efficiently, and will hold some teams flat in 2023 in terms of head count, while shrinking others. Meta says it expects 2023 year-end head count to be about flat with Q3 2022 levels.Meta now expects 2022 total expenses to be in the $85 billion to $87 billion range, a slight tweak from its previous forecast for $85 billion to $88 billion; the new range includes $900 million in charges for consolidating office facilities.Meta projects 2023 expenses in the range of $96 billion to $101 billion, including $2 billion in office consolidation charges. At the midpoint of the range, that would be a 15% hike in expenses. That forecast is likely one reason the stock is getting pummeled—investors have been urging Meta to slash spending.In an open letter to CEO Mark Zuckerberg and the Meta board earlier this week, Altimeter Capital COE Brad Gerstner urged Meta to cut staff by 20%, reduce capital spending by $5 billion a year and cap spending on the metaverse to no more than $5 billion annually. Meta doesn’t appear to be following his advice.Meta said it expects operating losses from its Reality Labs unit, which include virtual reality headsets and development of the metaverse, to “grow significantly year over year” in 2023. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” the company said.In the quarter, Meta lost $3.7 billion in the Reality Labs unit. The “family of apps” segment—the core social media business—had income from operations of $9.3 billion. Advertising revenue in the quarter was $27.2 billion, down 3.6% from a year earlier.Meta said it expects capital spending of $32 billion to $33 billion this year, and $34 billion to $39 billion next year, “driven by our investments in data centers, servers, and network infrastructure.” The range is well above the Street consensus forecast for capital spending for 2023 of $29 billion. The company added that “an increase in AI capacity is driving substantially all of our capital expenditure growth in 2023.”On the news, shares of companies viewed as likely beneficiaries of the company’s aggressive spending plan soared in premarket trading Thursday, with Arista Networks(ANET) up 9.1%, Nvidia (NVDA) up 4.9% and Advanced Micro Devices (AMD) up 2.8%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":9986025096,"gmtCreate":1666859259715,"gmtModify":1676537818266,"author":{"id":"3579604205508926","authorId":"3579604205508926","name":"JordanNgu","avatar":"https://community-static.tradeup.com/news/33119172962d98ee781c6ec29d5bc201","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"Okay&nbsp;","listText":"Okay&nbsp;","text":"Okay","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9986025096","repostId":"1178169124","repostType":2,"isVote":1,"tweetType":1,"viewCount":86,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9966026175,"gmtCreate":1669352888597,"gmtModify":1676538187778,"author":{"id":"3579604205508926","authorId":"3579604205508926","name":"JordanNgu","avatar":"https://community-static.tradeup.com/news/33119172962d98ee781c6ec29d5bc201","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9966026175","repostId":"1184446148","repostType":4,"repost":{"id":"1184446148","pubTimestamp":1669303814,"share":"https://www.laohu8.com/m/news/1184446148?lang=&edition=full","pubTime":"2022-11-24 23:30","market":"us","language":"en","title":"3 Big Reasons To Love Apple Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=1184446148","media":"TheStreet","summary":"Let’s take a step back from the news of the day: why is AAPL a great stock to own? Today, I list my ","content":"<html><head></head><body><p>Let’s take a step back from the news of the day: why is AAPL a great stock to own? Today, I list my top 3 fundamental reasons.</p><p>When it comes to <b>Apple</b> stock, even I am sometimes to blame for focusing a bit too much on the “here and now”. What do iPhone sales in the holiday quarter look like? Is Apple pulling back production in China? Can the stock build upon recent momentum?</p><p>So now, I take one step back. More fundamentally, what are some of the main reasons why investors might want to own AAPL shares? There are probably many of them, but I will start with my own top 3 list today.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a934c8d32eb2b80a07cf98af6caf9467\" tg-width=\"1240\" tg-height=\"827\" referrerpolicy=\"no-referrer\"/><span>Figure 1: 3 Big Reasons To Love Apple Stock</span></p><h2>AAPL Reason #1: Massive ROIC</h2><p>ROIC, or return on invested capital, is a metric that many analysts and investors like to track. It contrasts a company’s earnings (numerator) against the cash raised from debt and equity investors (denominator). Think of the formula:</p><p>ROIC = NOPAT ÷ Invested Capital, in which:</p><ul><li>NOPAT is the net operating profit after tax, a similar concept to net income</li><li>Invested capital is largely equity plus debt investments minus cash</li></ul><p>The higher the ROIC, the better. It means that the company is able to “deliver more with less”: lots of profits with relatively small quantities of capital invested into the firm.</p><p>Companies in a good competitive position whose wide moat protects the business model well tend to have high ROIC. On the other hand, cut-throat competition that chips away at a company’s profits and margins tends to lead to low ROIC.</p><p>Apple’s ROIC hovered around 35% in 2010, within three years following the launch of the iPhone and the iPad. That’s really not a bad number at all, considering Apple’s weighted cost of capital that is probably short of 10%.</p><p>But since then, Apple’s ROIC has skyrocketed (see below). Today, the number is a staggering 56%. Relative to the investment that debtholders and equity holders have placed into the company, Apple is a massive profit-producing machine.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/fbc66682044c0970e857a65b8974a103\" tg-width=\"1178\" tg-height=\"336\" referrerpolicy=\"no-referrer\"/><span>Figure 2: AAPL&#39;s ROIC.</span></p><p>There are two main reasons why Apple has been able to increase its ROIC, especially in the past five years. First, profits (the numerator) have increased as (1) the 5G-capable iPhone models became a hit among consumers, (2) Apple was able to maintain pricing power, and (3) margins improved with the growth of the services segment.</p><p>Second, investments in the company (the denominator) have decreased sharply, mostly due to Apple’s aggressive strategy of buying back shares since 2012(more on this below).</p><h2>AAPL Reason #2: Highly Efficient</h2><p>Although services represent a sizable 20% of total sales, Apple is still primarily a consumer products vendor. Companies like it live and die by how tightly it manages working capital – that is, receivables and inventory on the asset side, payables on the liability side.</p><p>The less cash a company ties up in receivables and inventory, and the longer it takes a company to pay its own vendors, the better. Introducing the concept of cash conversion cycle: the time it takes a company to convert cash into inventory, and then back into cash via sales.</p><p>On working capital management, Apple stands out. According to Finbox, Apple’s cash conversion cycle is -62 days – yes, a negative number. It effectively means that Apple does not tie up cash in operations at all: instead, operations are financed by Apple’s vendors.</p><p>The Cupertino giant is one of the few tech companies in the world that can pull this off.</p><h2>AAPL Reason #3: Shareholder Friendly</h2><p>One of the reasons why Apple has been able to increase its ROIC drastically (see #1 reason above) is due to share buybacks. Cash return to shareholders alone, in fact, is a great incentive to own Apple stock.</p><p>The chart below shows how Apple has been aggressive at buying its own shares since 2012 – shortly after CEO Tim Cook took over from legendary founder Steve Jobs. From 26 billion shares outstanding in 2013, the count has been cut by nearly half now.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/edc0fe435dfa3b213c100c70c5fed531\" tg-width=\"1186\" tg-height=\"339\" referrerpolicy=\"no-referrer\"/><span>Figure 3: AAPL&#39;s diluted shares.</span></p><p>The benefits have been twofold. First, fewer shares outstanding mean that net income is distributed across fewer shareholder units. As a result, earnings per share, a metric closely tracked by investors and analysts, have increased.</p><p>Second, Apple’s stock buyback program allows the company to be an ever-present bullish force in the market. Even when other investors turn sour on Apple stock, at least the Cupertino company can be there to create demand for its own shares.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>3 Big Reasons To Love Apple Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Big Reasons To Love Apple Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-11-24 23:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.thestreet.com/apple/stock/3-big-reasons-to-love-apple-stock><strong>TheStreet</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Let’s take a step back from the news of the day: why is AAPL a great stock to own? Today, I list my top 3 fundamental reasons.When it comes to Apple stock, even I am sometimes to blame for focusing a ...</p>\n\n<a href=\"https://www.thestreet.com/apple/stock/3-big-reasons-to-love-apple-stock\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果"},"source_url":"https://www.thestreet.com/apple/stock/3-big-reasons-to-love-apple-stock","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1184446148","content_text":"Let’s take a step back from the news of the day: why is AAPL a great stock to own? Today, I list my top 3 fundamental reasons.When it comes to Apple stock, even I am sometimes to blame for focusing a bit too much on the “here and now”. What do iPhone sales in the holiday quarter look like? Is Apple pulling back production in China? Can the stock build upon recent momentum?So now, I take one step back. More fundamentally, what are some of the main reasons why investors might want to own AAPL shares? There are probably many of them, but I will start with my own top 3 list today.Figure 1: 3 Big Reasons To Love Apple StockAAPL Reason #1: Massive ROICROIC, or return on invested capital, is a metric that many analysts and investors like to track. It contrasts a company’s earnings (numerator) against the cash raised from debt and equity investors (denominator). Think of the formula:ROIC = NOPAT ÷ Invested Capital, in which:NOPAT is the net operating profit after tax, a similar concept to net incomeInvested capital is largely equity plus debt investments minus cashThe higher the ROIC, the better. It means that the company is able to “deliver more with less”: lots of profits with relatively small quantities of capital invested into the firm.Companies in a good competitive position whose wide moat protects the business model well tend to have high ROIC. On the other hand, cut-throat competition that chips away at a company’s profits and margins tends to lead to low ROIC.Apple’s ROIC hovered around 35% in 2010, within three years following the launch of the iPhone and the iPad. That’s really not a bad number at all, considering Apple’s weighted cost of capital that is probably short of 10%.But since then, Apple’s ROIC has skyrocketed (see below). Today, the number is a staggering 56%. Relative to the investment that debtholders and equity holders have placed into the company, Apple is a massive profit-producing machine.Figure 2: AAPL's ROIC.There are two main reasons why Apple has been able to increase its ROIC, especially in the past five years. First, profits (the numerator) have increased as (1) the 5G-capable iPhone models became a hit among consumers, (2) Apple was able to maintain pricing power, and (3) margins improved with the growth of the services segment.Second, investments in the company (the denominator) have decreased sharply, mostly due to Apple’s aggressive strategy of buying back shares since 2012(more on this below).AAPL Reason #2: Highly EfficientAlthough services represent a sizable 20% of total sales, Apple is still primarily a consumer products vendor. Companies like it live and die by how tightly it manages working capital – that is, receivables and inventory on the asset side, payables on the liability side.The less cash a company ties up in receivables and inventory, and the longer it takes a company to pay its own vendors, the better. Introducing the concept of cash conversion cycle: the time it takes a company to convert cash into inventory, and then back into cash via sales.On working capital management, Apple stands out. According to Finbox, Apple’s cash conversion cycle is -62 days – yes, a negative number. It effectively means that Apple does not tie up cash in operations at all: instead, operations are financed by Apple’s vendors.The Cupertino giant is one of the few tech companies in the world that can pull this off.AAPL Reason #3: Shareholder FriendlyOne of the reasons why Apple has been able to increase its ROIC drastically (see #1 reason above) is due to share buybacks. Cash return to shareholders alone, in fact, is a great incentive to own Apple stock.The chart below shows how Apple has been aggressive at buying its own shares since 2012 – shortly after CEO Tim Cook took over from legendary founder Steve Jobs. From 26 billion shares outstanding in 2013, the count has been cut by nearly half now.Figure 3: AAPL's diluted shares.The benefits have been twofold. First, fewer shares outstanding mean that net income is distributed across fewer shareholder units. As a result, earnings per share, a metric closely tracked by investors and analysts, have increased.Second, Apple’s stock buyback program allows the company to be an ever-present bullish force in the market. Even when other investors turn sour on Apple stock, at least the Cupertino company can be there to create demand for its own shares.","news_type":1},"isVote":1,"tweetType":1,"viewCount":202,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":9969404811,"gmtCreate":1668484805734,"gmtModify":1676538064447,"author":{"id":"3579604205508926","authorId":"3579604205508926","name":"JordanNgu","avatar":"https://community-static.tradeup.com/news/33119172962d98ee781c6ec29d5bc201","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false},"themes":[],"htmlText":"<a href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$&nbsp;</a><v-v data-views=\"1\"></v-v>","listText":"<a href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$&nbsp;</a><v-v data-views=\"1\"></v-v>","text":"$DJIA(.DJI)$","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9969404811","isVote":1,"tweetType":1,"viewCount":131,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}