Apple is back, as earnings beat expectations causing stock to soar
The past few months have been rough for Apple investors and today with the release of Apple’s third quarter results many of us finally bare a smile on our faces.
Apple’s earnings report showed a total revenue of $42.4 billion with $1.42 earnings per share. This beats investor and analyst expectations of $42.09 billion and earnings of $1.38 per share. However, it was still a set back for the company as last year Apple reported a revenue of $49.6 billion on earnings of $1.85 per share. Nonetheless, the end result came in as positive. As the difference between the expected and actual earnings caused Apple shares to skyrocket nearly 5% after-hours. The 5% gain is a huge win for investors, as they have been hungry for action from the tech giant and have finally got it.
But like any company Apple has faced its disappointments. iPhone sales have continued to decline with only 40.4 million being sold in comparison to the 51.2 million last quarter.
But is Apple’s reign over?
Many analyst and actual results have shown Apple’s decline in the market. However, should we really ever count the company out? I say absolutely no, the company is simply changing priorities.
Apple was once the company that broke records and created products that dominated the market, but now the company is looking into other avenues to allow investors to find value in Apple. In simple words, Apple is diversifying itself. And in doing so the company has been using its massive cash pile which has been catching dust to finally invest big money into startups and is planning acquisitions like no other. Recently, the company has bought a $1 billion stake in the Chinese taxi company Didi Chuxing and has made several acquisitions in this year alone. One of Apple’s acquisitions that caught my eye this year was Emotient, a facial recognition system. Apple could be in the works of creating a new facial unlock for iOS or it could plan to use Emotient ability to detect emotions via facial expression to create something even more innovative.
We should also make note that Apple using the $1.4 billion of its cash is a good thing, as the money is finally going to bring in new investors and hopefully returns for current investors.
Another positive point made when the report came out was when CEO Tim Cook announced that Apple Pay now accounts for 75% of “contactless” payments. This is impressive, especially with Android devices dominating the market.
Overall, this is the tech world, every company usually has something planned for a rainy day. Especially one at Apple’s level will have many tricks up its sleeve. So no need to worry Apple investors, today has been a good day. Just make sure to lend a hand to your fellow investor hit by Twitter’s massive dip after-hours.
Make sure you read our article on Twitter’s disappointing earnings report.