Apple Stock News: Apple Beats Estimates for Fiscal Q4

Apple Stock News

Apple stock rose to a record high this past week due to strong fiscal Q4 results and guidance.  The market capitalization nearly breached $900B as it added $32B to its total stock value.  The positive outlook also quelled any concerns surrounding the iPhone X.  There certainly doesn’t appear to be any lack of enthusiasm for the premium product which went on sale this past Friday.  Long lines of shoppers were flocking to get their hands on the device which is in short supply.

The great quarter from Apple led many analysts to increase their price targets for the stock.  Good news could be found everywhere.  Revenue was $52.58B, an increase of 12% YoY, which handily beat the consensus estimate of $50.69B.  GAAP EPS was $2.07 which also beat the consensus estimate of $1.87.

The exceptional results were driven in large part by growth in many non-iPhone segments.  This goes to show that Apple is not just a smartphone company.  Revenue from non-iPhone segments rose 24% to $23.1B.  iPad revenue grew 14% to $4.8B.  Mac revenue grew 25% to $7.2B.  Other Products (Apple Watch, headphones, tv, etc.) grew 36% to $3.2B.  The Apple Watch unit sales even rose over 50%.  Services revenue (App Store, Apple Music, iCloud, Apple Pay) grew 24% to $8.5B.  The big jump in Services revenue was also aided by a $640M revenue accounting adjustment that is rumored to be a payment from Google relating to a mobile ad partnership.  Apple also looks to have righted the ship in the Greater China market as revenue there broke a trend of declines and rose 12% to $9.8B.  Overall Emerging Market revenue was also up over 20%.

Holiday Quarter Guidance

For the upcoming holiday quarter, Apple gave guidance of $84-$87B, with the midpoint being slightly above the analyst consensus of $85.16B.  CEO Tim Cook stated on the conference call that the 8 and 8+ have been Apple’s best-selling models since they launched.  This countered the general opinion that sales have been lackluster.  He even said that the 8+ has “gotten off to the fastest start of any Plus model.”  Regarding the iPhone X, he implied that demand is extremely strong and the amount they sell in the future will be limited only by supply issues, certainly not by a lack of demand.  Apple will also be able to produce more iPhone X units this quarter than previously estimated.  Current estimates are for 30M units this quarter, a big upgrade from the previous estimate of 20M units, which was itself a past downgrade from 40M units.

The only non-spectacular news from the announcement was that Apple guided a 38-38.5% gross margin for the December quarter compared to the year-ago 38.5% GM (37.9% in September quarter).  Most analysts have been expecting an increase in margins due to the high prices of the new iPhone models.  CFO Maestri’s stated reason for the lower than expected guidance was high initial costs for new products, most likely a reference to the X model, as well as a headwind from higher memory chip prices.

For the latest Apple Stock News, AAPL closed at $172.50 per share on November 3rd, 2017. It generated a gain of 2.61% from its previous close on November 2nd, 2017, when it closed at $168.11 per share.

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