Tips to trade Apple quarterly earnigns
Apple is one of the most high-profile companies in the world. The company has a market valuation of more than $955 billion. It generates more than $265 billion from its different products like the iPhone and MacBook.
From this revenue, the company had a net profit of more than $59 billion, which makes it the most profitable company in the world.
Apple released its third quarter earnings on Tuesday, after the market closes. Its results was the most anticipated and closely-followed results in Wall Street and around the world.
This is simply because of the special role that the company has in the world. For example, it is the largest holdings of all major ETFs and mutual funds. It is also one of the most owned stocks in the United States.
In the results, investors expected the company’s results to show that the company had revenues of more than $53.4 billion in the quarter. This will be a slight increase from the same quarter next year.
Profits are expected to drop to $9.6 billion or $2.10 per share. This will be a 16% decline from the same quarter last year.
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Why the number of iPhones sold has continued to decline?
These results come as the environment for the company keeps getting difficult. Results from the company show that the number of iPhones sold has continued to decline. There are a number of reasons for this.
First, the overall quality of the smartphone industry has been very high. This means that people are often going for less expensive devices like those manufactured by Huawei and OnePlus instead of Apple.
Second, with the quality of the iPhone being very high, people are lacking the incentive to upgrade. For example, the iPhone that was released last year was much similar to the one released in the year before.
Third, the trade war and the subsequent ban on Huawei has not gone well in China, which is the biggest market for the iPhone. Most Chinese now want to own the devices made by Chinese brands like Huawei.
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These devices are usually of a high quality and of lower prices.
What’s next?
Therefore, with the iPhone sales declining, the company has realized the need to move to other areas. In the past few years, the company has been promoting its services segment. This is the fastest-growing segment.
It includes products like the iCloud and Apple Music. A few months ago, the company announced a new set of products like the revamped news app and the upcoming video content app. The initial reviews of the news app have been negative.
In this quarter’s report, investors wanted to see the growth in the iPhone segment. However, since the company did not release any new iPhone in the quarter, there are chances that the growth will be slow. In addition, investors will be looking at the progress the company is making in the services segment.
Third, investors wanted to know about the company’s recent announcement that it was acquiring the struggling modem business from Intel.
Fourth, they wanted to know about the recent denied proposal for tariff relief from Donald Trump.
Finally, the biggest focus will be on the upcoming iPhones.
Other useful resources
- U.S. to deny tariff relief for Apple Mac Pro parts from China – Reuters
- Apple aims for iPhone 11 services-fueled rebound even as current iPhone sales dip
