Investors going into this earning season were expecting good things from a number of companies. One of them was Apple (NASDAQ: AAPL), with most Wall Street analysts predicting that the company would go on to report an impressive fourth quarter on Wednesday afternoon after the markets closed. As it turned out, however, the company managed to beat out expectations once again, reporting what ended up being Apple’s most profitable quarter in the company’s history.
The general consensus was that Apple would report something around $100 billion in quarterly revenue, thanks to strong sales of its new iPhone 12. The initial delay of the new smartphone ended up only further building the pent-up demand for when it eventually launched later in 2020. However, as it turned out, Apple reported a more than impressive $111.4 billion in sales, a new all-time high for the company.
Analysts are already expecting this new generation of iPhones, which includes 5G connectivity, to kickstart a new wave of buyers from people who had previously kept on to their older iPhones instead of buying new ones.
“We strongly believe the iPhone 12 supercycle hype has become a reality with this week giving the Street its first glimpse of underlying iPhone 12 demand and key commentary from [Apple CEO Tim Cook] looking ahead into the next few quarters,” wrote Dan Ives, an analyst over at Wedbush. He went on to say that these results completely dispel any negative concerns about Apple’s business going into 2021.
Despite what was a good piece of news, shares of Apple are down around 3.9% right now in pre-market trading. Normally, this doesn’t make much sense, especially given how good this news is. However, when you consider everything that’s been going on right now, with stocks like GameStop (NYSE: GME) surging another 190% and throwing all sense out the window, it’s not surprising that we’re operating in some rather abnormal market conditions right now.
The only real concern, which may or may not be pushing down Apple’s stock price right now, is just how long the company can keep up this growth rate. Even with the new iPhone 12 and Tim Cook’s optimistic assessment for the future, some analysts are expecting things to slow back down. However, almost all agree that the company still has some room to grow left, despite its gargantuan size.
Apple Company Profile
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, Apple Care, Apple TV+, Apple Arcade, Apple Card, and Apple Pay, among others. Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News