While Apple’s stock still tries to catch its breath (its soaring high like a diamond in the sky right now), the company has smashed all analyst estimates to get back on its habit of reporting blockbuster quarters. The Company posted quarterly revenue of $42.4 billion and quarterly net income of $7.8 billion, or $1.42 per diluted share.
These results compare to revenue of $49.6 billion and net income of $10.7 billion, or $1.85 per diluted share, in the year-ago quarter. Gross margin was 38 percent compared to 39.7 percent in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.
Talking about these latest earnings, Apple CEO Tim Cook says,
We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter. We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June.
If you look at the figures though, you’d get a clear picture of where the company is heading now. Apple, which was once largely considered a brand, riding on an always-on growth mode, has now come at a saturation level. iPhone, iPad and Mac sales have declines — and by a good enough margin — which goes on to show that those hay-days are long but gone. This can obviously be attributed to the rise of brands like Xiaomi, OnePlus and others, who are offering premium quality hardware — better than iPhones a lot of times — at massively affordable prices. As a result, these companies have been able to target markest such as India, which has cost-conscious consumers.
But investors however, have taken this in stride. They have understood that the kind of growth Apple showed during iPhone 5 times can not be expected of the company, and thus have lowered expectations. As a result, a good news from Apple, works exactly that way for investors. And hence the skyrocketing stock price.
The quarterly report however, has brought in another interesting feature. Apple’s cash-in-hand, a figure which has kept Apple way above the rest in this domain, has actually decreased for the first time since I can remember. That however, hasn’t got much to do with the company performance, but has got more to do with its recent investments.
The most notable of them all was the recent $1 billion cheque which the company wrote to China’s Didi Chuxing. There aren;t any other significant investments — at least those which have been disclosed in public domains. But Apple has been known to spend decent cash in secretive R&D, most of which remains undisclosed. An example of that could be the long rumoured Apple car. This might — and a stressed might I must stress — also direct us upon an understanding, that Apple is perhaps ready to use its staggering cashpile for strategic investments.
We’ll be giving out a more comprehensive coverage on the earnings. So stay tuned.