Apple Inc. (NASDAQ: AAPL)
Earnings Report
After the market closed on Tuesday, Apple Inc (AAPL) reported earnings that topped analyst estimates and put shares on the move in the post market session. Revenue came in at $51.5 billion or $1.96 per share while analysts polled at Thomson Reuters where expecting AAPL to post $1.88 on $51.1 billion in revenues. This is an increase of 38% on earnings per share but the surprising number that everyone was really interested in was the china numbers, which came in scorching hot compared to analyst’s estimates as revenues nearly doubled to $12.5 billion. So I think it’s safe to say that China’s economic slowdown hasn’t affected their cravings for AAPL products. Sales also rose domestically by 10% to $21.77 billion and were able to sell roughly 48 million iPhones during the last quarter. Tim Cook, Chief Executive Officer, was very enthusiastic on these earnings and had to this to say in the conference call:
“Today, we are reporting a very strong finish to a record breaking year and I’d like to reflect on some of the highlights. We completed our fiscal year in September, and we are proud to report revenue of $234 billion, an increase of 28% and $51 billion over 2014. This is our largest absolute revenue growth ever.
We made huge inroads into emerging markets generating over $79 billion in revenue and growing 63% despite very strong headwinds from foreign exchange rates . . . Revenue in Greater China nearly doubled year-over-year and we continue to focus and invest heavily there. On Saturday we opened a new store, our 25th in Greater China to a very enthusiastic crowd and we are on track to achieve our goal of 40 stores by the middle of next year.” Seeking Alpha
This was a very strong statement from AAPL as a lot of investors and analysts had concerns on their business in China and the possible impact it could have on their growth. However, the results were quite the contrary as sales were extremely strong and they are even investing more time and money over there, which leaves me to believe that they believe China still has huge potential. There is really not a whole lot to dislike about this mega company as far as I can see. They have incredible brand recognition, superior products, and a TON of cash reserves for investments and R&D. Analysts currently have a strong buy rating with an average price target of $147.15.
AAPL Technicals
AAPL got a nice boost in the post market session when they released earnings that pushed share prices up to the $118 mark but it was quickly followed by selling that pushed share prices back down to $114 before holding its ground and bouncing back up. Shares opened the day at $116.93, a 1.7% jump from yesterdays close of $114.55, and finished the day strong at $119.27. $120 is going to be the next big level of resistance and then from there we’re looking at $127 and the $130 marks while support should be met at $114 and the $110 levels. This earnings release could be the catalyst we needed to get shares of AAPL out of their slump and they may even gain enough momentum to test those previous highs in the low $130s.
AAPL started the year off great with a strong move to the $130 price range after breaking consolidation around the $110 level. Prices have tested that $130-134 level twice now, but has had no success at being able to hold its ground and has resulted in a pullback each time until if finally gave way and traded lower on China economic growth worries. Shares peaked out at $134.54 back in April and hit lows of $92.00 in August when the market sold off. It will be nice to see share prices break through $120 on volume so that will be an important price level that I will be watching and could even be a solid entry point if we can get some momentum going.
About Apple Inc.
Apple, Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. Its products and services include iPhone, iPad, iPod, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and accessories, service and support offerings. The company also sells and delivers digital content and applications through the iTunes Store, App Store, iBooks Store, and Mac App Store. It sells its products worldwide through its retail stores, online stores, and direct sales force and third-party cellular network carriers, wholesalers, retailers, and value-added resellers to the consumer and also sells third-party iPhone, iPad, Mac and iPod compatible products, including application software, and accessories, through its online and retail stores. The company was founded by Steven Paul Jobs, Steve Wozniak and Ronald Gerald Wayne on April 1, 1976 and is headquartered in Cupertino, CA. MarketWatch
