Apple Inc (Nasdaq: AAPL) didn’t sell as many iPhones as it anticipated in its fiscal first quarter, but its numbers were better than many investors had feared.
On Thursday, Apple reported first-quarter earnings per share of $3.89 on revenue of $88.3 billion. Both numbers beat consensus analyst expectations of $3.86 and $87.2 billion, respectively.
Apple also reported iPhone unit sales of 77.3 million. While that number came up short of consensus estimates of 80 million units, the stock showed little initial reaction to the miss after several analysts had recently predicted even weaker iPhone numbers. Apple may have sold fewer iPhones than expected, but its average sales price on phones was $796, well above consensus estimates of $756.
Looking ahead, Apple is anticipating second quarter revenue of between $60 billion and $62 billion and gross margins of between 38 percent and 38.5 percent. Analysts had been expecting revenue of $65 billion on gross margins of 38.9 percent.
“iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” CEO Tim Cook says in a statement. “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January.”
Apple’s Services revenue was up 18 percent to $8.5 billion in the first quarter, and Albion Financial chief investment officer Jason Ware says Services revenue is the key to Apple’slong-term future.
“It’s an iPhone company with this long-run path toward Services growth, and Services have been growing at about 25 percent for some time and carries a lot higher margins than the iPhone business,” Ware said on CNBC. “That slight miss there will require a bit of digging on our part, but it’s been certainly one of the legs of the stool for our bullish thesis on Apple’s stock.”
Gerber Kawasaki analyst Ross Gerber says all of the recent analyst reports of iPhone weakness were much ado about nothing.
“I guess all that analyst garbage was garbage and they sold a perfectly fine amount of phones,” Gerber says. “Earnings were good. They’re…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
