This stock has been on fire lately. Sinking I-Phone revenues have been replaced by watches – ear buds and services. Rising sales in the smart watch and other wearables and services . The business is ably to morph itself into different shapes as demand fluctuates and changes . Who would ever have know that an I-phone would cost more than 2 laptop computers.
Warren Buffetts top holdings include $63 Billion of APPL . The gift that keeps on giving . Serious investors must place these shares on their BUY LIST.
THE TRADE : This is a buy and forget type of investment for long term investors. Buy and leave to your grand children . For traders , average up – sell calls above $280 and buy below $240
AppleInc. is showing it has life beyond the iPhone, reporting growth in other gadgets and services in the latest quarter that outweighed further pain in its bedrock business.
The tech giant reported revenue rose 1.8% in the September quarter to $64.04 billion, driven by rising sales of wearables including its smartwatch and services such as apps, streaming-music subscriptions and mobile payments. Those gains helped offset a 9.2% decline in iPhone sales, which have been falling for the past year.
Profit fell 3% to $13.69 billion. That topped expectations but marked the first time since Chief Executive Tim Cook took over in 2011 that Apple’s profit has declined in all four quarters of a fiscal year. The company’s operating expenses have risen considerably since 2017 when it introduced a pricier new iPhone with facial-recognition technology and increased its spending on research and development. Revenue and profit for the fiscal year through September both edged down, their first annual declines since 2016.
Apple has responded to the challenge of a maturing smartphone market by accelerating sales of software, services and accessories across the 900 million iPhones in use world-wide. The company said sales of its services business rose 18% in the latest quarter, while sales in its wearables business soared 54% on the popularity of its AirPods wireless earbuds. The company is expanding on its entertainment push with the launch Friday of its new Apple TV+ streaming service.
Still, services and wearables together brought in $19 billion in quarterly revenue, less than 60% of the iPhone. Apple reassured investors that its new iPhone 11 models are being well received, offering guidance for the current period that largely exceeded Wall Street’s projections. It expects sales between $85.5 billion and $89.5 billion for the period, an improvement on the $84.31 billion it posted in the current quarter last year.
In an interview, Chief Financial Officer Luca Maestri said Apple is on track for a strong Christmas sales season thanks to customer interest in the newest iPhones and the addition of new wearables, including a pricier version of AirPods that went on sale this week. He added that the company’s China business has improved considerably and said Chinese customers’ initial response to the new iPhones has been “very, very good.”
“We think the iPhone performance will improve versus what we’ve seen in fiscal 2019,” Mr. Maestri said. “We think wearables will be very strong.”
Some investors have feared new iPhone models introduced in September would fail to catch on with consumers, and weigh on sales in the coming year because they offer limited new features. The iPhone still accounts for more than half of Apple’s revenue.
“The new phones are proving to be enough,” said Stephen Lee, principal at Logan Capital Management, an Ardmore, Pa.-based investment adviser with $3 billion under management that counts Apple among its largest holdings. “It’s been a year where smartphones are transitioning and management has done the things necessary to be relevant when 5G is ready.”
Apple said per-share earnings in the latest quarter were $3.03. Analysts surveyed by FactSet expected earnings of $2.83 a share.
Shares of Apple are up again .
Apple shares have surged in recent months, partly in anticipation that the company will release its first 5G iPhone in September 2020. Wall Street analysts expect the company to return to iPhone revenue growth in the fiscal year ending in September 2021.
Apple’s operating expenses rose 9% in the quarter, outpacing revenue growth. Spending has jumped in recent years as it added features such as facial-recognition technology to iPhones and poured more money into research and development.
Other tech giants have been in a similar pattern, and tech shares, which have surged in recent months, gave up some gains this week as companies reported spending more to fuel their core businesses. Google parent Alphabet Inc. on Monday posted a 23% decline in profit as spending on people and infrastructure rose. Last week, Amazon.com Inc. reported a 26% profit decline, partly because of increased shipping costs.
“To find new categories of innovation at these companies that are hitting up against the law of large numbers, you have to really invest to sustain existing categories or add new categories,” said Mike Olson, an analyst with Piper Jaffray & Co. He said investors are accepting of that if the spending eventually translates to faster growth.
The past year has been one of Apple’s rougher stretches. It started with the company slashing guidance for the first time in more than a decade because of weak iPhone sales and a downturn in its China business. Later, two of its top executives—design chief Jony Ive and retail chief Angela Ahrendts —announced their departure. From Wall St Journal
|10/31/2019||Monness Crespi & Hardt||Buy||$265.00 ➝ $300.00|
|10/31/2019||Needham & Company LLC||Reduce ➝ Average||$280.00|
|10/31/2019||Morgan Stanley||Overweight ➝ Positive||$289.00 ➝ $296.00|
|10/31/2019||Canaccord Genuity||Buy||$260.00 ➝ $275.00|
|10/31/2019||DA Davidson||Buy ➝ Market Perform||$300.00|
|Neither PSN nor its owners, members, officers, directors, partners, consultants, nor anyone involved in the publication of this website, is a registered investment adviser or broker-dealer or associated person with a registered investment adviser or broker-dealer and none of the foregoing make any recommendation that the purchase or sale of securities of any company profiled in the PSN website is suitable or advisable for any person or that an investment or transaction in such securities will be profitable. The information contained in the PSN website is not intended to be, and shall not constitute, an offer to sell nor the solicitation of any offer to buy any security. The information presented in the PSN website is provided for informational purposes only and is not to be treated as advice or a recommendation to make any specific investment. Please consult with an independent investment adviser and qualified investment professional before making an investment decision.|