Combating superlatives fatigue

The following chart shows Apple’s growth for net sales and earnings over the last few years. I’ve used a grading system with color coding to show bands of growth.

It’s easy to become de-sensitized to the scope of these numbers, but it bears repeating: the growth has been steadily increasing since 2009.

These abstractions in growth can also be shown in a direct “before-and-after” view of the income statement.

This latter view gives an idea of how much bigger the company’s business is now vs. a year ago. Not just on the revenues but also the cost of these revenues and what is retained.

This story never gets old.

  • rattyuk

    Once again, Awesome work Horace…

    Was Q308 when Apple changed the way they reported earnings?

    • KenC

      Q1 2010.

      It never gets old when I think that this quarter's profit, $6B, Apple's slowest quarter of the year, almost matches Apple's sales for a whole year back in 2003, $6.2B, right before the iPod really took off.

  • Horace, thank you for the amazing work.

    You mentioned on twitter that you have the "mother of all backlogs" of Apple charts to publish.!/asymco/status/624996528550

    I do hope that there are more to come; really enjoy reading your analyses!

  • Pollak

    What is your point?

    • It's just a compliment. With each new post, there's always something new and I look forward to learn more from the author.

    • Hamranhansenhansen

      Point is: he wants more charts!

  • danthemason

    Reading the posts is free, explanations, that'll cost ya……….

  • N8nNC

    100% Year-on-year is an impressive sight.

    Now, we should harbor no illusion that this rate can continue forever, but given their current size and no end in sight, how big will they get?

    This may be my vote for a t-shirt chart.

  • WTE

    If I try to take the view that "Wall st" is not giving Apple a higher P/E for some reason. I ask myself, what do they think is going to slow or stop the current growth rate, what is that reason and is it valid? Looking at all the product lines, ignoring any new products, which ones are going to drop off? iPod, no, its already proven to be sustainable even with Apple cannabilizing it slightly with their other products. iPhone, no, its selling well, and plenty of room to grow more, with China and VZ. iPad, no, its already on its way to a similar market share coop as the iPod. Mac, no, its proving to buck the PC trend and is accelerating wheras PCs are slowing. So even when I try to convince myself I'm maybe missing something and kidding myself, I just can't see the logic of bailing out of AAPL.

  • Apparently Apple's earnings are like a pungent rose. At first whiff you are amazed, but after 10 minutes you don't even notice it. Perhaps this is the force behind fabled Law of Large Numbers, the more incredible the performance, the more desensitized Wall Street becomes to Apple's impressive numbers. After amazing Wall Street a few times, it is no longer fazed by great performance, regardless of what Apple does.

  • Nate

    Horace, you are one badass charting mofo.

  • Sälli

    Could you consider making a similar plot (the first one) of let's say AMZN, RIMM, or MSFT? Would be really nice to get this kind of graphical perspective on the P/Es.

  • Pingback: Charting Apple’s off-the-chart growth | My Best Stock Alerts()

  • JamesW

    Hi Horace,
    Awesome charts. What software do you use to create these?

    • asymco

      All my charts are built using Numbers from Apple Inc. It's available on the Mac App Store for $19.99.

      • JamesW

        Of course! How could I not have guessed 🙂

  • gctwnl

    There is one issue that bothers me. Maybe you can comment, Horace? The point is currency exchange. In USD, Apple is up since the start of this year, but in EUR, Apple is down around 3%. The reason is the ongoing depreciation of the USD against the EUR. Would it be possible to create some sort of analysis that dampens the distortions of currency fluctuations somewhat? Say, in Mars bars instead of USD?

  • How might one overlay stock performance? Intuitively, high growth should correspond with a rising equity valuation. Hence, might this be a useful predictive tool?

  • debugger

    The biggest hurdle on Apple's stock, aside from the health issue of Steve Jobs, is the question of whether they can maintain the margin they have now on their iPhones.

    Their ASP since the inception of the device has averaged over $600 (courteously shown by the host of this blog in a previous post), with their competitors coming not even close. One can't help but ask the question which is "how will Apple maintain their pricing power going forward". There is no question that they make the highest quality products from both design and usability standpoints in the user's perspective and are highly demanded across the globe. But the technology gap is closing since the device launched in 2007, with the Androids catching up very rapidly. How much do they have to continue to lead to maintain that pricing power, baring in mind that most of that power lies vis-a-vis against the network operators in many parts of the world in which the device is subsided. They do not want to get cornered in to a niche market similar to what happened in their war against Windows. If they do move down market, would they also lose profitability in doing so?

  • Pingback: Visualization of Apple’s Income Statement | asymco()