Market News & Analysis

Top Story

Apple To Fresh All Time High After Stellar Q1 Earnings?

Apple is trading 1.5% higher in pre-market trading, looking to reach a fresh all time high on the open, after earnings and iPhone sales smashed expectations.

Q1 results:
  • EPS +19% $4.99 vs $4.54 exp.
  • Revenue +9% at $91.8 billion vs $88.1 billion exp.
  • iPhone revenue +8% at $55.96 billion vs $51.5 billion
  • Other products $10 billion vs $9.52 billion exp.
  • Q2 guidance $63 - $67 billion.

What’s not to like? Apple reported revenue and profits significantly higher than forecast, in its best quarter of the year. Revenue, a solid 9% higher was partially driven by iPhone revenues which grew an impressive 8%.

Recently, investors have turning more attention towards Apple’s “Other Products” which includes Apple Watch and AirPods. Apple confirmed that demand outstripped supply of these two products during the quarter, boding well for future sales. This category alone achieved $10 billion in sales

Wider guidance

Q2 guidance was wider than usual. This is owing to uncertainty caused by the deadly coronavirus. A $4 billion dollar range indicates that there could well be some issues surrounding the Apple and its links to China.

Apple operates two facilities in the city of Wuhan, the epicentre of the outbreak and currently in lock down while another 69 of its facilities are located in Suzhou, which has for the moment not been cut off, but has prolonged its New Year holiday for another week. It seems that Apple will not be able to avoid economic fallout from the virus.

5G ahead

Whilst the potential impact from coronvirus across the supply chain must be factored in, investors are also looking ahead to the roll out of 5G and the first 5G iPhone in September could see iPhone sales jump as customers have a strong reason to upgrade.

Worth its $1.4 trillion valuation

Top and bottom line figures significantly higher than forecast, one of the biggest quarterly profits from any company, ever and the prospect of a new iPhone “supercycle”, are helping to justify the 100% rally in the stock price over the past year and its $1.4 trillion valuation.

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.