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Taiwanese Lab Leak Sharpens Debate On Pandemic Origin

Taiwanese Lab Leak Sharpens Debate On Pandemic Origin

Authored by Hans Mahncke and Jeff Carlson via The Epoch Times,

On Dec 9, 2021, Taiwan announced that a researcher working in a Biosafety-level 3 (BSL-3) laboratory in Taipei had tested…

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Taiwanese Lab Leak Sharpens Debate On Pandemic Origin

Authored by Hans Mahncke and Jeff Carlson via The Epoch Times,

On Dec 9, 2021, Taiwan announced that a researcher working in a Biosafety-level 3 (BSL-3) laboratory in Taipei had tested positive for the Delta variant of COVID-19 “while experimenting on the virus in the lab.” Chen Shih-chung, the head of Taiwan’s Central Epidemic Command Center (CECC) confirmed that the female researcher had tested positive for COVID-19 after being “exposed to the pathogen” during research that was conducted in mid-November at the Academia Sinica’s Genomics Research Center in Taipei.

Notably, Taiwan has not experienced any recent cases of COVID-19, a fact noted by Chen who said, “We believe the possibility of infection from the workplace is higher because we have zero confirmed infections in the community.”

It was later reported that the researcher had been bitten by a mouse during two separate incidents. Taipei’s deputy mayor Huang Shan-shan, who described the woman as a “research assistant,” said that she had been bitten by a laboratory mouse carrying the Gamma strain of the virus on Oct. 15, but subsequently tested negative for infection.

Taiwan’s Minister of Health and Welfare Chen Shih-chung arrives at a press conference at the headquarters of the Centers for Disease Control in Taipei on March 11, 2020. (Sam Yeh/AFP via Getty Images)

However, a little more than a month later on Nov. 19, she was again bitten by a mouse in the lab. This time, for reasons that remain unknown, the researcher did not undergo testing after the second bite until well after she had developed physical symptoms. According to Taiwan News, the woman developed a cough in late November, which intensified during the first week of December, but she did not seek out testing until Dec. 8.

James Liao, the president of Academia Sinica, cited six separate failures that contributed to the infection incident. These included the “failure to duly report a scientist being bitten by lab mice; not working with lab mice in a biosafety cabinet; not following protocols in removing hazmat suits; new personnel not receiving adequate training; lack of supervision and monitoring during experiments; and lax management in lab practices.”

Academia Sinica’s Genomics Research Center in Taipei, Taiwan, on Feb. 6, 2018. (Lysimachi/CC BY-SA 4.0)

Taiwan Leak Occurred Despite Use of High Security Lab

Taiwan’s lab leak of COVID-19 took place at a BSL-3 lab, which mandates the use of personal protective equipment, biosafety cabinet​s, sustained directional airflow without recirculation, as well as self-closing and interlocked doors. By contrast, the gain-of-function experiments being conducted on coronaviruses at the Wuhan Institute of Virology were done at much less secure BSL-2 labs.

As context, Rutgers University biologist Richard Ebright has stated: “BSL-2 is the biosafety level of a US dentist’s office (i.e., lockable door, screened windows, sterilizer, gown, and gloves).” Ebright told the Financial Times: “If [coronavirus] work was happening, it should definitely not have been happening at BSL-2, that is roughly equivalent to a standard dentist office.”

The use of BSL-2 labs for gain-of-function experiments by the Wuhan Institute of Virology has been heavily criticized by many scientists. Michael Lin, a bioengineer at Stanford University, told MIT Technology Review that allowing work on potentially dangerous bat viruses at BSL-2 is “an actual scandal.”

And a prominent and early supporter of the natural origins narrative, Columbia University virologist Ian Lipkin, changed his mind about the virus’s origin after the Wuhan Institute admitted it conducted its coronavirus experiments at a BSL-2 lab.

“It shouldn’t have happened,” Lipkin stated. “People should not be looking at bat viruses in BSL-2 labs.”

Lipkin said that he now considers a lab leak to be a viable theory, saying that his “view has changed.”

Taiwan Leak Response Stands in Stark Contrast to CCP’s Wuhan Response

Additionally, the open and immediate manner in which the Taiwanese government handled its lab leak incident contrasts sharply with China’s handling of the COVID-19 pandemic. Chinese Communist Party (CCP) officials refused to acknowledge the outbreak until Taiwan notified international authorities on Dec. 31, 2019. But despite the CCP’s refusal to acknowledge an outbreak, there were earlier warnings from those stationed in Wuhan.

According to the U.S. Consul General in Wuhan, the city was hit by an unusually vicious flu-like outbreak in October 2019. And a November 2019 intelligence report by the U.S. military’s National Center for Medical Intelligence reportedly warned of a contagion and stated that “it could be a cataclysmic event.” Chinese authorities have reportedly traced early cases of COVID-19 to mid-November.

A man wears a mask while walking in the street in Wuhan, China on Jan. 22, 2020. (Getty Images)

Notably, at the same time that the outbreak in Wuhan appeared to be reaching a critical juncture, the Wuhan Center for Disease Control, which was conducting coronavirus research alongside the Wuhan Institute of Virology, suddenly moved its lab’s location on Dec. 2, 2019, to a spot just a few hundred yards from the Huanan Seafood market—which would initially be cited as the origin of the early COVID-19 cases. The CDC’s new location for its lab was also directly adjacent to another hotspot of later COVID-19 cases, the Union Hospital, where a group of doctors first became infected.

The genomic sequence of COVID-19 was discovered no later than Dec. 27, 2019. Both Chinese and Western scientists obtained copies at that time. But, under pressure from the CCP, neither Chinese nor Western scientists shared the information publicly. When a Chinese scientist from Shanghai finally released the sequence on Jan. 11, 2020, the CCP shut down his lab.

The CCP’s cover-up and the capitulation by scientists allowed the virus to continue to spread at a critical time. It also gave the CCP additional time to obfuscate the virus’s origins and create a Natural Origins narrative centered around the Huanan Seafood Market.

Additionally, although the World Health Organization’s (WHO) initial report on the origins of the outbreak stated that a lab leak was extremely unlikely, the lead investigator of that report, Peter Ben Embarek, told a Danish documentary team that the lab leak theory was probable, and suggested that a Chinese researcher could have been infected by a bat while taking samples in connection with research at a Wuhan lab.

A sign of the World Health Organization in Geneva, Switzerland, on April 24, 2020. (Fabrice Coffrini/AFP via Getty Images)

Embarek also admitted that a deal had been struck between the WHO’s investigative team and their Chinese counterparts. The lab leak theory could be mentioned in the WHO’s final report, but only on the condition the report didn’t recommend any specific studies to further that hypothesis.

China’s censorship has taken many forms. Recently, Peter Daszak, the president of EcoHealth, the body through which Dr. Anthony Fauci funded the Wuhan Institute of Virology, told the National Institutes of Health (NIH) that he was unable to hand over requested genetic sequence data from his gain-of-function experiments to the NIH because the data was going through an approval process by CCP authorities.

WHO team member Peter Daszak leaves his hotel after the World Health Organization (WHO) team wrapped up its investigation into the origins of the COVID-19 coronavirus in Wuhan in China’s central Hubei province on February 10, 2021. (Hector Retamal/AFP via Getty Images)

This arrangement with the CCP is a breach of the terms and conditions of Daszak’s NIH grant, which specifically required that all genetic sequence data be made publicly available. CCP oversight and control was not part of Daszak’s agreement.

The fact that genetic sequence data that may relate directly to the origin of the pandemic remains under the control of the CCP also raises questions about the claims of both Daszak and NIH that their Wuhan experiments could not have caused the pandemic.

Lab Leaks Common

The incident in Taiwan has renewed the debate over the origin of the pandemic. According to Yanzhong Huang, a Chinese public health expert at the Council on Foreign Relations, “if the lab worker is confirmed to have been infected at her workplace, then this will add credibility to the lab leak theory.”

Although this case is raising new questions about the likelihood of a lab as the origin of the pandemic, lab leaks are not as rare as the media would have the public believe.

The 1918 Spanish flu pandemic marked the first appearance of the H1N1 virus. Although the initial outbreak was natural, the virus’s sudden reappearance in the late 1970s was actually due to a laboratory leak of a stored strain of the H1N1 virus. We know this because the genetic sequence of the virus in the 1970s outbreak was nearly identical to the sequences of decades-old strains. Put another way, the virus was not evolving during this time, it was sitting in a lab. Indeed, the NIH notes that a “biosafety lapse in a research laboratory is now most often cited as the cause of the 1977-1978 reemergence of the H1N1 influenza virus strain.”

Seattle policemen wear white cloth face masks during the Spanish flu pandemic, Dec. 1918. (Public Domain)

In 1979, spores of anthrax leaked from a lab in the Soviet Union, killing scores of people. At the time Soviet authorities covered up the origins of the outbreak, claiming that it came from contaminated meat. In a twist eerily reminiscent of the World Health Organization’s COVID-19 origins investigation, a molecular biologist from Harvard University, Matthew Meselson, was allowed to travel to the Soviet Union to investigate the outbreak.

Upon his return, he issued a report that backed the Soviet version of events, claiming that the outbreak started at a contaminated meat processing plant. Meselson stated that that explanation was “plausible and consistent with what is known from medical literature and recorded human experiences with anthrax.” In another parallel to the natural origins narrative for COVID-19, where illegal wildlife markets were initially blamed for the pandemic, Meselson claimed that the outbreak was caused by “the illegal sale of meat.”

After the fall of the Soviet Union, it was finally revealed in 1992 that the outbreak had in fact originated at a military research facility.

The original Severe Acute Respiratory Syndrome (SARS) outbreak in 2003 made headlines across the world. However, a lesser known fact is that the SARS virus has subsequently leaked out of various labs at least six times. The first incident occurred in Singapore—a country known for its meticulousness and attention to detail—shortly after the initial outbreak ended. There were subsequent SARS lab leaks in Beijing as well as in Taiwan in 2003 and 2004.

The years 2013 and 2014 were particularly bad for lab accidents. Notably, many of the accidents that happened during this period took place at the University of North Carolina at Chapel Hill where lab mice escaped the university’s lab on at least eight occasions, including mice that were infected with SARS and H1N1 viruses. In response, the NIH stated that “it appears the measures taken by the University of North Carolina to reduce the likelihood of these events have not been effective.”

Poor biosafety at University of North Carolina at Chapel Hill is all the more notable in light of the fact that the university houses Ralph Baric’s lab. In 2015, Baric, who is a pioneer of gain-of-function experiments, famously collaborated with the director of the Wuhan Institute of Virology, Shi Zhengli, to create a hybrid version of a bat coronavirus that had been adapted to grow in mice and to mimic human disease.

Chinese virologist Shi Zhengli is seen inside the P4 laboratory in Wuhan, capital of China’s Hubei Province, on Feb. 23, 2017. (Johannes Eisele/AFP via Getty Images)

Richard Ebright, who warned in 2015 that the only impact of gain-of-function work was “the creation, in a lab, of a new, non-natural risk,” has stated that these prior leaks underscore the fact that it “is eminently plausible that a Wuhan laboratory worker handling Sars-related coronaviruses was infected and then transmitted the infection to the general public, sparking the pandemic.” Notably, Ebright’s 2015 warning was in response to the experiments carried out by Baric and Shi Zhengli.

Incidents of lab leaks in just the last 10 years have involved notably dangerous pathogens, including Dengue, Anthrax, H5N1, smallpox, Ebola and Zika.

Although there are far too many incidents of lab leaks to list here, one event is particularly relevant—the November 2019 lab accident in China when nearly 200 staff at the Lanzhou Veterinary Research Institute became infected with brucellosis, also known as Mediterranean Fever. Subsequently, thousands of residents of Lanzhou reportedly also fell ill. CCP authorities have denied that the Veterinary Research Institute was responsible, blaming the outbreak on polluted waste gas from a pharmaceutical facility which was allegedly carried by wind to the research institute. Ironically, even if the CCP’s version of events is accurate, it would still have been a lab accident.

Taiwan’s Leak Refocuses Debate on COVID-19 Origin

The Lanzhou outbreak, which happened at almost exactly the same time as the Wuhan outbreak, should have served as an immediate red flag for anyone looking into the origins of COVID-19. But the Lanzhou Outbreak has been largely ignored by the media. The incident underscored not only that laboratory accidents happen with disturbing regularity but also that the CCP has a history of covering them up.

In 2019, Yuan Zhiming, the vice-director of the Wuhan Institute of Virology, wrote a review of the many safety deficiencies within China’s many laboratories. He noted that “several high-level BSLs have insufficient operational funds for routine yet vital processes,” noting that many of China’s BSL-3 laboratories “run on extremely minimal operational costs or in some cases none at all.”

Just one year earlier, in 2018, U.S. Embassy officials visited the Wuhan Institute of Virology and warned the State Department that there was “inadequate safety at the lab, which was conducting risky studies on coronaviruses from bats.” They also reported that there was a lack of trained staff at the Wuhan Institute of Virology.

FDA Commissioner-designate Scott Gottlieb testifies during a Senate Health, Education, Labor and Pensions Committee hearing on Capitol Hill in Washington on April 5, 2017. (Zach Gibson/Getty Images)

Former U.S. Food and Drug Administration head Scott Gottlieb has stated that “lab leaks happen all the time.” During a May 2021 interview on Face the Nation, Gottlieb noted, “In China, the last six known outbreaks of SARS-1 have been out of labs, including the last known outbreak, which was a pretty extensive outbreak that China initially wouldn’t disclose that it came out of a lab.” Gottlieb said that “It was only disclosed finally by some journalists who were able to trace that outbreak back to a laboratory.”

The transparency and responsiveness with which Taiwan handled its recent biosafety lapse contrasts sharply with China’s ongoing efforts to impede any investigation into the origins of the pandemic. China’s efforts to thwart any true investigation of the virus’s origin also raise questions as to why the United States was providing technology and funding for gain-of-function experiments to a communist regime that is known for its lack of transparency.

Former-MI6 chief, Sir Richard Dearlove recently summed up China’s approach to the pandemic when he told the Australian, “I’m pretty sure that the Chinese after the outbreak in Wuhan, and they’re very good at doing this, sat down and developed their own information campaign and this was almost certainly driven by the Ministry of State Security and run out of the PRC leadership to make sure that there was suppression of any suggestion that their narrative was not the correct one.”

Dearlove echoed the concerns of many when he ominously noted that ”what concerns me and what worries me is the extent to which the West went along with this.”

Tyler Durden Wed, 12/15/2021 - 19:00

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Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A…

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Growing Number Of Doctors Say They Won’t Get COVID-19 Booster Shots

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A growing number of doctors say that they will not get COVID-19 vaccine boosters, citing a lack of clinical trial evidence.

I have taken my last COVID vaccine without RCT level evidence it will reduce my risk of severe disease,” Dr. Todd Lee, an infectious disease expert at McGill University, wrote on Twitter.

A vial of the Pfizer-BioNTech COVID-19 vaccine is seen in a file photograph. (Justin Sullivan/Getty Images)

Lee was pointing to the lack of randomized clinical trial (RCT) results for the updated boosters, which were cleared in the United States and Canada in the fall of 2022 primarily based on data from experiments with mice.

Lee, who has received three vaccine doses, noted that he was infected with the Omicron virus variant—the vaccines provide little protection against infection—and described himself as a healthy male in his 40s.

Dr. Vinay Prasad, a professor of epidemiology and biostatics at the University of California, San Francisco, also said he wouldn’t take any additional shots until clinical trial data become available.

“I took at least 1 dose against my will. It was unethical and scientifically bankrupt,” he said.

Allison Krug, an epidemiologist who co-authored a study that found teenage boys were more likely to suffer heart inflammation after COVID-19 vaccination than COVID-19 infection, recounted explaining to her doctor why she was refusing a booster and said her doctor agreed with her position.

She called on people to “join the movement to demand appropriate evidence,” pointing to a blog post from Prasad.

“Pay close attention to note this isn’t anti-vaccine sentiment. This is ‘provide [hard] evidence of benefit to justify ongoing use’ which is very different. It is only fair for a 30 billion dollar a year product given to hundreds of millions,” Lee said.

Dr. Mark Silverberg, who founded the Toronto Immune and Digestive Health Institute; Kevin Bass, a medical student; and Dr. Tracy Høeg, an epidemiologist at the University of California, San Francisco, joined Lee and Prasad in stating their opposition to more boosters, at least for now.

Høeg said she did not need clinical trials to know she’s not getting any boosters after receiving a two-dose primary series, adding that she took the second dose “against my will.”

I also had an adverse reaction to dose 1 moderna and, if I could do it again, I would not have had any covid vaccines,” she said on Twitter. “I was glad my parents in their 70s could get covid vaccinated but have yet to see non-confounded data to advise them about the bivalent booster. I would have liked to see an RCT for the bivalent for people their age and for adults with health conditions that put them at risk.”

The U.S. Food and Drug Administration (FDA) granted emergency use authorization to updated boosters, or bivalent shots, from Pfizer and Moderna in August 2022 despite there being no human data.

Observational data suggests the boosters provide little protection against infection and solid shielding against severe illness, at least initially.

Five months after the authorization was granted, no clinical trial data has been made available for the bivalents, which target the Wuhan strain as well as the BA.4 and BA.5 subvariants of Omicron. Moderna presented efficacy estimates for a different bivalent, which has never been used in the United States, during a recent meeting. The company estimated the booster increased protection against infection by just 10 percent.

The FDA is preparing to order all Pfizer and Moderna COVID-19 vaccines be replaced with the bivalents. The U.S. Centers for Disease Control and Prevention, which issues recommendations on vaccines, continues advising virtually all Americans to get a primary series and multiple boosters.

Professor Calls for Halt to Messenger RNA Vaccines

A professor, meanwhile, became the latest to call for a halt to the Pfizer and Moderna vaccines, which are both based on messenger RNA technology.

At this point in time, all COVID mRNA vaccination program[s] should stop immediately,” Retsef Levi, a professor of operations management at the Massachusetts Institute of Technology, said in a video statement. “They should stop because they completely failed to fulfill any of their advertised promise[s] regarding efficacy. And more importantly, they should stop because of the mounting and indisputable evidence that they cause unprecedented level of harm, including the death of young people and children.”

Levi was referring to post-vaccination heart inflammation, or myocarditis. The condition is one of the few that authorities have acknowledged is caused by the messenger RNA vaccines.

Read more here...

Tyler Durden Thu, 02/02/2023 - 19:10

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Apple Pares Much Of Drop During Earnings Call

Apple Pares Much Of Drop During Earnings Call

Update 6:00pm:  Apple has staged a remarkable reversal after hours, and erased almost the entire…

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Apple Pares Much Of Drop During Earnings Call

Update 6:00pm:  Apple has staged a remarkable reversal after hours, and erased almost the entire loss after the company said that it expects a 5% impact from FX rates in Q2, and also expects iPhone revenue growth to accelerate in Q2. CEO Tim Cook was also asked whether the move to higher ASPs for the iPhone is sustainable in light of the sharp decline in sales, and whether this will continue in a worsening economy. Cook said the 14 Pro and 14 Pro Max did extremely well until the supply-chain constraints. He says this is definitely a “strong Pro cycle” and credits the new features in the device. He says he’s happy that Apple is now shipping to the demand.

Tim Cook also said that AI is critical to Apple and mentions features like crash-and-fall detection and the use of AI in features like EKG on the Apple Watch. He says AI will effect everything the company does, including all products and services.

Apple is quite bullish on India and other emerging markets, with CEO Tim Cook saying the company will soon open its first retail stores in India. He also said Apple saw marked improvement in China in December (versus November) after another round of Covid re-openings.

As Bloomberg notes, the company also stuck to a line that revenue and sales of individual product categories would have been higher if not for supply-chain constraints and issues stemming from the macroeconomic environment.

* * *

With both Amazon and Google sliding after reporting disappointing earnings and mixed guidance, it was all up to the world's biggest company, AAPL, to provide some hail mary for the tech earnings season which for better or worse is concentrated in a one hour stretch this afternoon. Alas, it was not meant to be and after missing on the top and bottom line, AAPL has joined the parade of selling and tumbled after hours due to numbers which the market was clearly not impressed with.

  • EPS $1.88 vs. $2.10 y/y, missing estimate $1.94
  • Gross margin $50.33 billion, -7.2% y/y, missing estimate $52.03 billion
  • Revenue $117.15 billion, -5.5% y/y, missing estimate $121.14 billion
    • Products revenue $96.39 billion, -7.7% y/y, missing estimate $98.98 billion
    • IPhone revenue $65.78 billion, -8.2% y/y, missing estimate $68.3 billion
    • Mac revenue $7.74 billion, -29% y/y, missing estimate $9.72 billion
    • IPad revenue $9.40 billion, +30% y/y, beating estimate $7.78 billion
    • Wearables, home and accessories $13.48 billion, -8.3% y/y, missing estimate $15.32 billion
    • Service revenue $20.77 billion, +6.4% y/y, beating estimate $20.47 billion
    • Greater China rev. $23.91 billion, -7.3% y/y, beating estimate $21.8 billion
  • Cash and cash equivalents $20.54 billion, -45% y/y, estimate $29.91 billion

And here is AAPL's diluted EPS in context: needless to say, could have been better.

Commenting on the quarter, Tim Cook said that “during the December quarter, we achieved a major milestone and are excited to report that we now have more than 2 billion active devices as part of our growing installed base.”

CFO Luca Maester chimed in: “our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop. We continued to invest in our long-term growth plans, generated over $24 billion in operating cash flow, and returned over $29 billion to our shareholders during the quarter. The strength of our ecosystem, unmatched customer loyalty, and record sales spurred our active installed base of devices to a new all-time high. This quarter capped another record-breaking year for Apple, with revenue growing over $28 billion and operating cash flow up $18 billion versus last year.”

Going back to the results, Apple missed consensus revenue in most product categories, with the exception of iPads, to wit:

  • IPhone revenue $65.78 billion, missing estimate $68.3 billion
  • Mac revenue $7.74 billion, missing estimate $9.72 billion
  • Wearables, home and accessories $13.48 billion, missing estimate $15.32 billion
  • IPad revenue $9.40 billion, beating estimate $7.78 billion

Of note: Apple recorded its first decline in iPhone revenue since the third quarter of 2020; yet in context, the 8% drop was still less than the 20% decrease reported by Samsung. Other major smartphone providers that have yet to report are expecting to see double-digit losses. Ironically, Apple may have fared comparatively well on smartphone revenue.

The silver lining: service revenue $20.77 billion, +6.4% y/y, beating estimates of $20.47 billion...

... and rose 6.5% Y/Y, an improvement from last quarter's 5.0%

One other place where investors were pleasantly surprised was China sales, which at $23.91 billion, beat the estimate of $21.8 billion by more than $2 billion.

None of that changes the fact that AAPL's sales by region were uniformly negative across the board.

And another potential problem: AAPL's gross cash continues to slide, dropping to $165 billion, the lowest since June 2014...

... while cash net of debt rebounded modestly from $49 billion to $54 billion, just above a 12 year low with the company having spent hundreds of billions on stock buybacks. Let's hope that Apple doesn't actually need to use that cash.

Commenting on the results, Bloomberg writes that the results show that Apple hasn’t been able to dodge the tech slowdown afflicting many of its competitors. Demand for smartphones and computers has slumped in the past year, and Covid-19 restrictions in China added to Apple’s woes during the holiday sales period. Timing was another issue: The company didn’t launch new Macs and HomePods until recent weeks, missing the end of the first quarter.

In response to these disappointing earnings, the stock predictably slumped as much as 4% before recouping some losses, although even with the drop it is back to where it was... yesterday.

Tyler Durden Thu, 02/02/2023 - 18:05

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Apple Slides After Missing On Top And Bottom-Line, First iPhone Revenue Drop Since 2020

Apple Slides After Missing On Top And Bottom-Line, First iPhone Revenue Drop Since 2020

With both Amazon and Google sliding after reporting…

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Apple Slides After Missing On Top And Bottom-Line, First iPhone Revenue Drop Since 2020

With both Amazon and Google sliding after reporting disappointing earnings and mixed guidance, it was all up to the world's biggest company, AAPL, to provide some hail mary for the tech earnings season which for better or worse is concentrated in a one hour stretch this afternoon. Alas, it was not meant to be and after missing on the top and bottom line, AAPL has joined the parade of selling and tumbled after hours due to numbers which the market was clearly not impressed with.

  • EPS $1.88 vs. $2.10 y/y, missing estimate $1.94
  • Gross margin $50.33 billion, -7.2% y/y, missing estimate $52.03 billion
  • Revenue $117.15 billion, -5.5% y/y, missing estimate $121.14 billion
    • Products revenue $96.39 billion, -7.7% y/y, missing estimate $98.98 billion
    • IPhone revenue $65.78 billion, -8.2% y/y, missing estimate $68.3 billion
    • Mac revenue $7.74 billion, -29% y/y, missing estimate $9.72 billion
    • IPad revenue $9.40 billion, +30% y/y, beating estimate $7.78 billion
    • Wearables, home and accessories $13.48 billion, -8.3% y/y, missing estimate $15.32 billion
    • Service revenue $20.77 billion, +6.4% y/y, beating estimate $20.47 billion
    • Greater China rev. $23.91 billion, -7.3% y/y, beating estimate $21.8 billion
  • Cash and cash equivalents $20.54 billion, -45% y/y, estimate $29.91 billion

And here is AAPL's diluted EPS in context: needless to say, could have been better.

Commenting on the quarter, Tim Cook said that “during the December quarter, we achieved a major milestone and are excited to report that we now have more than 2 billion active devices as part of our growing installed base.”

CFO Luca Maester chimed in: “our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop. We continued to invest in our long-term growth plans, generated over $24 billion in operating cash flow, and returned over $29 billion to our shareholders during the quarter. The strength of our ecosystem, unmatched customer loyalty, and record sales spurred our active installed base of devices to a new all-time high. This quarter capped another record-breaking year for Apple, with revenue growing over $28 billion and operating cash flow up $18 billion versus last year.”

Going back to the results, Apple missed consensus revenue in most product categories, with the exception of iPads, to wit:

  • IPhone revenue $65.78 billion, missing estimate $68.3 billion
  • Mac revenue $7.74 billion, missing estimate $9.72 billion
  • Wearables, home and accessories $13.48 billion, missing estimate $15.32 billion
  • IPad revenue $9.40 billion, beating estimate $7.78 billion

Of note: Apple recorded its first decline in iPhone revenue since the third quarter of 2020; yet in context, the 8% drop was still less than the 20% decrease reported by Samsung. Other major smartphone providers that have yet to report are expecting to see double-digit losses. Ironically, Apple may have fared comparatively well on smartphone revenue.

The silver lining: service revenue $20.77 billion, +6.4% y/y, beating estimates of $20.47 billion...

... and rose 6.5% Y/Y, an improvement from last quarter's 5.0%

One other place where investors were pleasantly surprised was China sales, which at $23.91 billion, beat the estimate of $21.8 billion by more than $2 billion.

None of that changes the fact that AAPL's sales by region were uniformly negative across the board.

Commenting on the results, Goldman writes that the results show that Apple hasn’t been able to dodge the tech slowdown afflicting many of its competitors. Demand for smartphones and computers has slumped in the past year, and Covid-19 restrictions in China added to Apple’s woes during the holiday sales period. Timing was another issue: The company didn’t launch new Macs and HomePods until recent weeks, missing the end of the first quarter.

In response to these disappointing earnings, the stock predictably slumped as much as 4% before recouping some losses, although even with the drop it is back to where it was... yesterday.

Tyler Durden Thu, 02/02/2023 - 17:01

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