There will be a way to track this. Will discuss later.
Sunday, July 31, 2022
Anticipation -- July 31, 2022
In the graphic below:
- five days, Monday - Friday;
- each day with two columns (except Friday): pre-market and after-market
Highlights:
- Monday: Devon, Diamondback (FANG)
- Tuesday: MPC, Pioneer, Coterra, BP, OXY, Starbucks
- Wednesday: MRO, Apache (APA)
- Thursday: COP, EOG, Cheniere
Must-watch television:
- CNBC, Jim Cramer, 7:45 a.m. to 8:15 am.
Focus On Fracking -- July 31, 2022
The lede:
Natural gas prices hit a 14 year high but closed lower; US oil exports were at a record high; US oil supplies were at new 18 year low, Strategic Petroleum Reserve was at a 37 year low; 4 week average of distillate exports hit a 47 month high.
The Latest US Oil Supply and Disposition Data from the EIA.
US oil data from the US Energy Information Administration for the week ending July 22nd indicated that despite another large oil withdrawal from the SPR, increased production from our wells, and a refinery slowdown, we still needed to withdraw oil from our stored commercial crude supplies for the 4th time in 6 weeks, and for the 21st time over the past 35 weeks, mostly because of another big increase in our oil exports.
Our imports of crude oil fell by an average of 355,000 barrels per day to an average of 6,164,000 barrels per day, after falling by an average of 156,000 barrels per day during the prior week, while our exports of crude oil rose by 789,000 barrels per day to a record high of 4,548,000 barrels per day, which meant that our trade in oil worked out to a net import average of 1,616,000 barrels of oil per day during the week ending July 22nd, 1,144,000 fewer barrels per day than the net of our imports minus our exports during the prior week.
Over the same period, production of crude from US wells was reportedly 200,000 barrels per day lower at 12,100,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 13,716,000 barrels per day during the July 22nd reporting week.
With our oil exports at a record high, we'll include a historical graph of them [at the linked blog], where you can see that prior to the end of 2014, US oil exports, except for those allowed under NAFTA, had been negligible because they had been banned 40 years earlier, in the wake of the Arab oil embargo. The ban on US oil exports was lifted in a spending bill that Congress passed during the last week of 2015, part of a compromise that Obama agreed to in order to avoid a government shutdown.
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After Hours
I had the apartment complex pool to myself this evening, from about 7:30 p.m. to 9:30 p.m. Then a few folks came out to grill and wade in the pool.
I swam almost non-stop from 7:30 to 9:30 and listened to Leonard Cohen, Blondie, Bob Dylan from the UE "boombox."
Taking A Short Break -- Probably Not Long -- July 31, 2022
Wow, that new NDIC GIS map server is absolutely incredible. I keep finding new features. In hindsight, it was well worth the wait, but one still wonders why it took so long? But it no longer matters. The new interactive map is incredible.
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For Investors Only
UBS surveyed its analysts for stocks with attractive upside vs. downside in volatile markets.
"We've focused on stocks where we believe our analysts have a truly differentiated view vs. consensus, and where we have interesting or proprietary data sources (from UBS Evidence Lab or elsewhere)," strategist Keith Parker wrote in a note. "From a strategy perspective, we've found that risk/reward is attractive when this much recession risk is priced (>80pctl) but as we move later cycle, avoiding the biggest underperformers becomes even more important for portfolio returns."
"Indeed, our analysts have identified opportunities with attractive upside vs downside skew in these volatile markets."
The top conviction picks by sector are at the link. Archived.
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Tow Trucks
The two-year twins "know" tow trucks very, very well. They see them on their street often. They've been looking for their own tow trucks for quite some time, and finally, they found them.
America's New Energy Crisis -- WSJ -- July 31, 2022
A reader sent me the link to a WSJ article to post.
This was my reply:
I was eager to read the article when I saw the headline yesterday, but was quite disappointed in the tone of the article. So much was wrong with the article.It appears today's journalists have a pre-conceived notion about energy and then write articles like this one to push their agenda. This reads more like an op-ed than a news story.
I'm not sure how to handle it on the blog: simply post it without comment or post my thoughts? The problem is, it would take up too much of my time.
I think I will post the link and move on. Too much other stuff to cover.
The writer, Christopher M Matthews has a resume to give him the credibility to write the article but somehow he missed the mark.
Okay, two three four five six seven comments:
The article reads like it will be a chapter in a new book yet to be written. There is nothing new in the article.
At the end of the day, it comes down to making American great again or following Greta down the wind-turbined road. The latter won't succeed of course, and a 79-year-old political relic won't be able to thread the needle.
But this is simply amazing: the US shale revolution was the biggest energy story in decades, perhaps the biggest energy story ever. There are hundreds of oil men and women that made it happen, and scores of shale companies that were instrumental in the success of the shale revolution, and how does Matthews cover it? It seems a third of the article was devoted to one inconsequential shale company: Bonanza Creek Energy. To say I was flabbergasted would be an understatement. What about Chesapeake, Continental Resources, Pioneer, Devon, EOG, to name just a few?
The author glosses over huge missteps made by the Biden administration and is less than candid about how Biden literally keystoned America and continues to gaslight voters.
I'm getting tired of the meme, "... gasoline prices have fallen to less than $4.30 a gallon ..." Prices never should have gotten above four dollars to begin with. Bragging that gasoline has fallen to less than $4.30 a gallon is gaslighting. What was the price we paid just a couple of years ago? $1.99? What happened in less than eighteen months? The writer provides no historical perspective on the price of gasoline, except in passing just before he started writing about Bonanza Energy Creek.
Do a single-word article search, do a word-search for "refineries" in the article. Not mentioned once.
Talk about a very, very unsatisfying conclusion to the article.
The Apple Page: Spotify -- July 31, 2022
Spotify vs Apple, earlier this year:
Now, this from MacRumors this past week:
From the linked article:
The change was announced as part of Spotify's latest earnings release for shareholders, which said that developing the Car Thing cost €31 million (approximately $32 million USD) and that its overall gross margin was "negatively impacted by our decision to stop manufacturing Car Thing." Spotify told TechCrunch:
Based on several factors, including product demand and supply chain issues, we have decided to stop further production of Car Thing units. Existing devices will perform as intended. This initiative has unlocked helpful learnings, and we remain focused on the car as an important place for audio.
Announced in April last year, the short-lived device first went on sale in the United States in February for $89.99. It was designed to be an in-car dash-mounted music and podcast player to provide a more seamless and personalized listening experience, especially in the large number of cars that do not support modern in-car infotainment systems or Apple CarPlay
Related posts:
- streaming numbers vs Hulu;
- Apple's most recent quarter, 3Q22:
- other MacRumor links;
- CarPlay, July 22, 2022:
This almost knocked me off my poolside chair:
- Apple engineering manager Emily Schubert said 98% of new cars in the U.S. come with CarPlay installed.
- She delivered a shocking stat: 79% of U.S. buyers would only buy a car if it supported CarPlay.
Think what else these two stats are telling you.
Random Update Of An Old Whitiing Wells In The Sanish -- July 31, 2022
This well runs parallel to the million-bbl-well, #17158, updated here.
The well:
- 27231, 365, Whiting, Waldock Federal 14-4-3XH, Sanish, t7/14; cum 444K 6/22; typical Bakken profile:
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 6-2022 | 10 | 230 | 254 | 17 | 2061 | 2042 | 0 |
| BAKKEN | 5-2022 | 31 | 688 | 708 | 30 | 6833 | 6771 | 0 |
| BAKKEN | 4-2022 | 26 | 525 | 550 | 28 | 5222 | 3830 | 1347 |
| BAKKEN | 3-2022 | 31 | 808 | 770 | 10 | 7077 | 7015 | 0 |
| BAKKEN | 2-2022 | 28 | 829 | 861 | 48 | 6212 | 6156 | 0 |
| BAKKEN | 1-2022 | 25 | 575 | 536 | 23 | 4945 | 4900 | 0 |
| BAKKEN | 12-2021 | 31 | 895 | 893 | 42 | 6984 | 6922 | 0 |
| BAKKEN | 11-2021 | 30 | 839 | 839 | 16 | 7015 | 6944 | 11 |
| BAKKEN | 10-2021 | 31 | 886 | 816 | 63 | 7296 | 7234 | 0 |
| BAKKEN | 9-2021 | 30 | 825 | 950 | 31 | 7087 | 7027 | 0 |
| BAKKEN | 8-2021 | 31 | 938 | 856 | 143 | 7566 | 7566 | 0 |
| BAKKEN | 7-2021 | 28 | 782 | 781 | 85 | 6086 | 5990 | 96 |
Initial Production Data For Wells Coming Off Confidential List This Next Week -- July 31, 2022
The wells:
- 38004, conf, Hess, CA-E Burdick-155-95-2932H-7, Capa,
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 5-2022 | 1473 | 2044 |
| 4-2022 | 13563 | 27310 |
| 3-2022 | 38881 | 45726 |
| 2-2022 | 35352 | 23963 |
- 37012, conf, CLR, LCU Ralph Federal 5-27H1, Long Creek, no production data,
- 37925, conf, BR, Lone Beaver 1-1-17MTFH, North Fork, no production data,
- 37205, conf, Grayson Mill, Larsen 10-2 XE 1H, Avoca,
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 6-2022 | 18260 | 0 |
- 37008, conf, CLR, LCU Reckitt Federal 4-22H, Long Creek, no production data,
- 38170, conf, CLR, LCU Foster Federal 7-28H, Long Creek, no production data,
- 38169, conf, CLR, LCU Foster FIU 6-28H1, Long Creek, no production data,
- 38701, conf, Summit Carbon Solutions, LLC, Slash Lazy H 5, wildcat, lot 1 section 6-141-86;
- 38168, conf, CLR, LCU Foster FIU 5-28H1, Long Creek, no production data,
- 37009, conf, CLR, LCU Reckitt Federal 3-22H1, Long Creek, no production data,
Wells Coming Off Confidential List This Next Week -- July 31, 2022
Wednesday, August 10, 2022: 8 for the month, 39 for the quarter, 378 for the year
- 38004, conf, Hess, CA-E Burdick-155-95-2932H-7,
- 37012, conf, CLR, LCU Ralph Federal 5-27H1,
Tuesday, August 9, 2022: 6 for the month, 37 for the quarter, 376 for the year
- 37925, conf, BR, Lone Beaver 1-1-17MTFH,
Monday, August 8, 2022: 5 for the month, 36 for the quarter, 375 for the year
- None.
Sunday, August 7, 2022: 5 for the month, 36 for the quarter, 375 for the year
- None.
Saturday, August 6, 2022: 5 for the month, 36 for the quarter, 375 for the year
- 37205, conf, Grayson Mill, Larsen 10-2 XE 1H,
Friday, August 5, 2022: 4 for the month, 35 for the quarter, 374 for the year
- 37008, conf, CLR, LCU Reckitt Federal 4-22H,
Thursday, August 4, 2022: 3 for the month, 34 for the quarter, 373 for the year
- 38170, conf, CLR, LCU Foster Federal 7-28H,
Wednesday, August 3, 2022: 2 for the month, 33 for the quarter, 372 for the year
- None.
Tuesday, August 2, 2022: 2 for the month, 33 for the quarter, 372 for the year
- 38169, conf, CLR, LCU Foster FIU 6-28H1,
Monday, August 1, 2022: 1for the month, 32 for the quarter, 371 for the year
- 38701, conf, Summit Carbon Solutions, LLC, Slash Lazy H 5,
Sunday, July 31, 2022: 31 for the month, 31 for the quarter, 370 for the year
- 38168, conf, CLR, LCU Foster FIU 5-28H1,
Saturday, July 30, 2022: 30 for the month, 30 for the quarter, 369 for the year
- 37009, conf, CLR, LCU Reckitt Federal 3-22H1,
Saturday, July 30, 2022
My Favorite Chart -- The US Money Market Fund Monitor -- July 30, 2022
My favorite chart, US money market fund monitor, link here. These folks are earning zero percent on their money. They are also ignoring the recent climate infrastructure and semiconductor / chip bills winding their ways through Congress.
Updated at the source on July 19, 2022.
Richard Zeits On Array Fracking — March 5, 2013
A reader asked about the definition of a drilling unit.
Link here: https://seekingalpha.com/article/1248431-bakken-the-downspacing-bounty-and-birth-of-array-fracking.
Bakken: The Downspacing Bounty And Birth Of 'Array Fracking'
Richard Zeits
10.33K Followers
"People are just starting, I think, to understand the true bounty of the Bakken and how long it's going to be there and how good it's going to be there."
James J. Volker, Chairman & CEO, Whiting Petroleum (WLL)
Year End 2012 Investor Conference Call
High Density Drilling May Re-Define The Play's Resource Potential
The Bakken is gearing up for a radical downspacing. High density testing will kick off this year with several large-scale pilots being simultaneously initiated across the play. Several operators - including Continental Resources (CLR), Whiting Petroleum, EOG Resources (EOG), Kodiak Oil & Gas (KOG) and Oasis Petroleum (OAS) - have announced extensive evaluation programs. Others are likely moving ahead in the same direction, without special announcement. Many of the pilots are comprehensive, geoscience-heavy and are based on very aggressive downspacing patterns. Several projects will test "vertical downspacing," with wells arrayed throughout a wide section of the Bakken/Three Forks (TF) interval, including the lower TF benches. Large amounts of capital are being committed to the effort: Continental plans to drill 47 wells in its program; Kodiak will be spending one third of its total budget this year on high density pilots; and Whiting is initiating six or seven multi-well projects.
Importantly, the downspacing in the Bakken may give broad acceptance to a new approach - which is showing signs of emerging - to managing fracture stimulation programs in thick shales. "Array Fracking" may be a good moniker to describe the concept of creating an integrated fracture systems in a thick, high oil content reservoir from multiple optimally positioned wellbores (similar approach seems to be gaining traction in the Niobrara).
The picture below from Continental's presentation provides the idea of how aggressive some of the downspacing pilots can get. In this specific case, "high density drilling" means up to 32 wells per single drilling unit in full development mode with laterals landed in four stacked intervals (possibly five if TF4 proved productive), a truly staggering density relative to the 7-8 well patterns that have been considered "dense" until recently.
(Click to enlarge)
(Source: Continental Resources October 9, 2012 Presentation)
The results of the evaluations, if positive, may become an important catalyst for the Bakken as a whole and could lead to yet another leap in the estimate for the play's recoverable reserves and economic value. Several highly reputed operators claim that they see minimal on-production communication between wellbores with short offset intervals (this is, for example, Continental's view based on their evaluation on over a hundred well pairs' performance, the view also shared by Kodiak). The feasibility of downspacing with dense arrays of wellbores is still an uncharted territory. It very much remains to be proven - for each specific area and set of geological intervals - that a meaningful downspacing can be achieved without big sacrifice in the EUR per well. The search process may also bring substantial modifications to the way wells are currently being completed and produced. If proven successful, the approach may mean quite a revolution for the Bakken development.
What is the motivation behind the effort to downspace? According to Whiting Petroleum's CEO Jim Volker:
What that really is all about is the recognition that when you go through - and do the oil in place calculations - through most of the properties and look at most of the operators in the basin, including ourselves, at the current density that we're drilling, we're getting about 10%, maybe as much as 11% or 12% recovery, of the oil in place. The question has always been -we've drilled at these wells based on essentially no interference - the question in our minds here over the last several months and last year or so, and not just ourselves but other operators, is: What happens? How do we increase that recovery efficiency?
And so the idea here is to drill a series of pilots - and we're going to be doing that in both Hidden Bench, Pronghorn, Sanish, possibly Missouri Breaks as well - to go in and drill on higher densities, essentially doubling the density in the better reservoirs in there, to demonstrate our ability to increase that recovery efficiency, get it up from 10% or 11% up to somewhere around 20%. And what that means is breaking up more rock. And we don't believe that with the current spacing that we are on, that we are getting all of the oil that's out there. So that's really what this is all about.
The amount of incremental oil that can be recovered if high density drilling proves viable is enormous. Continental Resources currently estimates total oil in place in the Bakken Petroleum System - including Deeper Three Forks - at 903 billion barrels.
(Click to enlarge)
(Source: Continental Resources October 9, 2012 Presentation)
Harold Hamm, Continental Resources' Chairman and CEO, commented during the company's earnings call last week:
Obviously, the initial recoveries are always low in these large fields. Historically, that's been the case. And as you go on and technology advances along with development, that number always tend to increase. So at 5% [oil recovery rate], you're looking at 45 billion barrels. So is that within reason? I think it is.
The 45 billion barrel estimate is almost a double from the 24 billion barrel figure established by Continental three years ago. In terms of oil reserves, the new estimate may put North Dakota, ahead of many oil-rich countries.
Continental Is Leading The Charge
Continental is again at the forefront of the effort, having announced four comprehensive pilot density projects to test 320-acre and 160-acre spacing in the Middle Bakken and first three benches of the Three Forks. The program includes 47 gross wells.
(Click to enlarge)
(Source: Continental Resources October 9, 2012 Presentation)
Importantly, Continental has stated in the past that they are not seeing any reduction in initial production rates from wells drilled on tighter spacing, the view the company re-iterated during its earnings conference call last week:
… As far as the density is concerned - obviously, we've got a lot of wells - we've got numerous wells that have been drilled in pairs of wells that are 660 feet offset: the Middle Bakken and the first bench well, and they are 660-foot offsets. And we're not seeing any influence on IPs or even EUR. So I mean, there's just a constant building of data set out here that's saying that the pattern is not causing any kind of degradation in at least initial rates.
… It really is going to be about the quality of the rock in a given area and how it performs with the stimulation technologies that we're currently applying, leaving room, of course, for additional optimization, additional stimulation techniques that we might use in the future.
Continental has already initiated its first 320-acre pilot density project, with three wells currently being completed and two more being drilled. The 160-acre pilot and the next 320-acre pilot are scheduled to spud by mid-2013, with the third 320-acre pilot planned to spud in the third quarter of 2013.
(Click to enlarge)
(Source: Continental Resources February 2013 Presentation)
Continental's evaluation program is remarkably comprehensive and integrates four intervals, the Middle Bakken, TF1, TF2 and TF3. In each pilot, the wells are arrayed to help determine the optimum well spacing and pattern to maximize the ultimate recovery of oil from the multiple Bakken and Three Forks reservoirs.
According to Continental's press release, these "aggressive pilot projects over a wide area in the field" will be drilled and completed over the next 18 months, with production coming on line starting in late 2013. All wells in the program should be producing in the first quarter of 2014. These exploration and appraisal programs should help determine the ultimate recovery of the field and drive valuations higher by accelerated de-risking and down-spacing.
The rest of the article is archived.For Investors -- CLR, DVN, EOG -- July 30, 2022
|
Company |
EPS |
Production |
Mkt Cap |
P/E |
Div Yld |
|
EOG |
7.50 |
0.450 |
65 |
15 |
2.7 |
|
CLR |
5.60 |
0.198 |
25 |
12 |
1.6 |
|
DVN |
5.35 |
0.250 |
41 |
12 |
8.4 |
CLR: 2Q22 -- Earnings Presentation
Pay attention to debt and how fast CLR is paying off debt.
Also note: a dividend payer. I'm laser-focused on dividends. I'm absolutely convinced that companies that don't pay a dividend will be at a disadvantage with those that do in the current investing environment. There are some exceptions, though I'm hard-pressed to come up with any.
Dividends don't have to be huge, but most mom-and-pop, like Warren Buffett, like receiving dividends.
Hulu -- July 30, 2022
At this post, I compared the most recent earnings quarters for XOM and AAPL. It was a very, very superficial comparison, but even so, some interesting data points fall out.
From that post:
- Apple has a record 813 million pad subscribers to its various streaming and music services;
- compare this to Hulu with 39 million subscribers
- Disney valued Hulu at $16 billion in 2019 when it agreed to acquire the rest of it from Comcast
- Hulu revenue, 2021: $10 billion; a 33% increase on the previous year.
And, of course, that led me to Hulu's most recent revenue and usage statistics (2022), posted June 27, 2022.
Before going there, note something else: this information is being hosted by something called "business of apps," home page here; and "about us" here. This is just incredible what folks are doing, this one based outside of London.
Back to Hulu at that link. It begins:
Video streaming service Hulu started its life with major backing from new and old media, receiving investment and content from NBC Universal, MSN, MySpace and Yahoo in 2007 before launching early in 2008.
Hulu entanglement with the media conglomerates of America placed it in stark contrast to Netflix, which while subservient to the licensing demands of the industry, is considered an independent operator. For most of its existence, the majority of Hulu was owned by one or several media companies, ending with Disney acquiring a majority share in 2019.
This perception of Hulu as a place film and TV studios dump content is a misconception, created during the era when several media companies had stakes in the company but did not want to launch any new titles on it. Before that period it was competitive with Netflix, attempting to break new ground with innovative online partnerships.
What's interesting about this, this platform will out-wiki Wikipedia over time for those interested in investing.
Sadly for Hulu, it was always in the shadow of Netflix, as its rival added millions of customers every year in North America, Europe and South America. Netflix and Amazon Prime Video both launched original TV series in 2015, another move that pushed the video streaming services away from old media’s control.
It would take Hulu two years to copy Netflix and Prime Video’s model, launching The Handmaid’s Tale in 2017. It became an instant hit for the streaming service, and provided Hulu with a way to rebrand as a content producer in its own right, instead of an aggregator of old television shows and movies.
As Hulu started to gain traction through its original series, Disney began to acquire more of it from other media conglomerates. First came the acquisition of 30 percent of Hulu from 21st Century Fox, then a month later AT&T sold 10 percent of the company to Disney. A month after that, Comcast announced it would sell its 33 percent share to Disney by 2024, ceding full control.
And then, everything from there.
At the "investors" tab at the top of the blog
- Streaming: link here. Streaming wars.
Apple has a long, long way to go to meet / beat Hulu but like everything about Apple, whatever it does becomes part of the Apple eco-system where everything connects seamlessly.
But look at that:
- Hulu: 40 million paid subscribers
- Apple: trending toward a billion paid subscribers
And, yes, I know, that's comparing apples to oranges, but don't get me started. LOL.
Placed Under "Things To Follow Up" -- Parcel: 8-153-93 -- July 30, 2022
Disclaimer: in a note such as this, there will be typographical and content errors. If this is important to you, go to the source.
Note: no other public source, ad-free, subscription-free, tracking-free provides data like this with regard to the Bakken.
Updates
October 5, 2024: the NDIC map suggests there have been no changes in this location since the original post.
Original Post
If I was asked which one section I was most interested in right now, it would be this section.
The parcel: 8-153-93.
At the sidebar to the right: things to follow up.
https://themilliondollarway.blogspot.com/2022/07/a-closer-look-at-70-acre-parcel-whiting.html. A closer look at the 70-acre parcel for which Whiting paid $2.346 million in 2022.
https://themilliondollarway.blogspot.com/2022/07/70-acre-parcel-in-mountrial-county-goes.html.
https://themilliondollarway.blogspot.com/2022/07/blm-sale-july-11-2022.html.
The parcel: 8-153-93.
Going forward, with re: to monthly hearing dockets, watch for this triangular (triangle) under-the-water parcel:
- Chord Energy, Whiting
- Alkali Creek oil field
- section 31-154-93
- section 32-154-93
The wells above are the CLR Jersey / Jersey Federal / Jersey FIU wells. These are very good wells. Some have hit / other approaching 500K bbls crude oil cumulative after just six years. These wells are tracked here and production has been updated. At least one well that was PNC'd is now a producing well. Note the rig on #27896, Jersey FIU 13-6H.
AAPL And XOM Profits -- July 30, 2022
From Reuters: record-breaking second-quarter profit.
... biggest quarterly profit ever on the back of soaring energy prices and as it kept a tight rein on spending.The top U.S. oil producer reported second-quarter net income of $17.9 billion, or $4.21 per share, an almost four-fold increase over the $4.69 billion, or $1.10 per share, it earned in the same period last year.
From The WSJ: Apple reports 11% decline in profit.
... reported an almost 11% decline in profit after weathering supply constraints and shutdowns in China.
... reported that profit fell to $19.4 billion, the worst quarter since the July-through-September period in 2020 ahead of the 5G-capable iPhone launch.
On a per share basis, the Cupertino, Calif., company’s profit fell to $1.20 from $1.30 a year earlier. Analysts surveyed by FactSet, on average, predicted earnings per share of $1.16.
XOM going forward: much is out of their control. Geopolitics and politics in Washington (DC), it seems, will be the driver.
AAPL going forward:
- despite an 11% drop in profit, Apple still reported a profit of $19.4 billion compared to Exxon's $17.9 billion
- COVID-19 lockdowns are behind us
- supply constraints becoming less of an issue
- APPL making huge strides in diversifying out of China
- partnerships with leading chip manufacturer: TSM; about to open another stateside chip facility;
- despite all those headwinds, Apple actually increased margins, in round numbers, from 42% to 44%
- has a record 813 million pad subscribers;
- compare this to Hulu with 39 million subscribers
- Disney valued Hulu at $16 billion in 2019 when it agreed to acquire the rest of it from Comcast
- Hulu revenue, 2021: $10 billion; a 33% increase on the previous year.
- absolute dominance in automotive entertainment systems (Car Play);
- Tim Cook does not give guidance; usually very conservative in comments; this time, sounded very enthusiastic about Apple's September, 2022-ending quarter
- the September, 2022-ending quarter is the "back-to-school" quarter
- most / all new products for the year will have been released
- both the new iPhone and new M2 MacBook Air open to rave reviews
- Gene Munster who knows Apple best said AAPL will be a $250-stock in two years
Income: back of envelope calculations on income:
- 89% of ? = $19.4 billion
- = $21.80 billion
- checking: eleven percent of $21.8 billion = $2.398 billion
- $21.8 billion - $2.398 billion = $19.4 billion; so checks
- in other words, if not an eleven percent decline, but same income year/year would have reported $21.80 billion income vs the $19.8 billion it reported and the $17.9 billion Exxon reported
Paid subscribers, link here:
- added more than 30 million paid subscriptions in 2022
- paid subscriptions reached a record 813 million in 3Q22 (June, 2022-ending quarter)
Incredible logistics and decision-making:
look at this headline from the linked WSJ article
With supply chain issues, semiconductor issues, with capricious Covid closings in China, Apple had too make a decision: where to focus; where to cut back.
- revenuee focus: iPhones
- cutback on other hardware, revenue:
- iPhone: $40.67 billion vs $38.33 billion estimated (huge)
- Mac: $7.38 billion vs $8.70 billion estimated (took the hit to focus on phones)
- iPad: $7.22 billion vs $6.94 billion estimated
- other hardware product (watches, headphone, ear pods, cables): $8.08 billion vs $8.86 billion estimated
- services: $19.60 billion vs $19.70 billion
Most interesting: analysts already looking at next quarter. Tim Cook looking five years down the road.
Five years down the road: big decision has to be made. Which direction to go with regard to Apple Car.
- hiring ex-Lamborghini engineer this past quarter is not trivial but still hard to interpret