Apple Earnings Beat Expectations, Showing Recovery From Trade War Pressures

[Hamartia Antidote]

https://www.forbes.com/sites/sergei...covery-from-trade-war-pressures/#77c27cba1dc0

Apple stock is up almost 55% this year.

ANTHONY WALLACE/AFP VIA GETTY IMAGES

Topline: Another major tech company beat earnings on Wednesday, as Apple shook off lingering tariff pressures and continued its good run, thanks to better-than-expected iPhone 11 sales and solid growth in its services business.

• Apple reported profit and revenue that came in higher than analyst estimates—with earnings per share of $3.03, compared with $2.84 expected—while also raising guidance for the holiday quarter.
• The tech giant has also benefited from increased optimism around trade negotiations in recent months, signaling that it expects growth over last year’s holiday quarter, when it was hit by a major downturn of iPhone sales in China—one of its core manufacturing bases.
• Although iPhone sales beat estimates, they were down 9% year-over-year, but total revenue grew slightly, hitting $64 billion—compared with the almost $63 billion expected by Wall Street analysts.
• Apple also saw impressive 18% growth in its services business, which includes Apple TV+, iCloud and AppleCare.
• Charles Lemonides, chief investment officer at ValueWorks LLC, is solidly bullish on Apple, especially in the long term: “It’s one of the best-loved brands in history and an unrivaled franchise.”
• Although Apple has been relatively slow on 5G so far, that will be a “huge growth driver” in the coming years, Lemonides predicts. “Because they have such a loyal base of customers, they don’t need to be first to market.”

Key background: Apple has been on a tear recently, with its stock hitting several new all-time high records this month and up 55% so far this year. Before it reported earnings, Wall Street had been predicting big upside: Raymund James analysts recently predicted that Apple shares could rally another 20% this year, thanks to higher prices for new iPhones and the large growth opportunities in 5G. Morgan Stanley, meanwhile, sees big potential for Apple TV+, predicting that it could generate $9 billion per year in revenue by 2025.

Crucial quote: “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store,” Apple CEO Tim Cook said in a statement.

 

[Menthol]

What I like about Apple is they put strongly in design.

While other companies, although they try to make a good looking product, there are holes and imperfection everywhere.