10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

The largest discount in the last 10 years

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Apple’s Latest Quarter Performance Shows What Potential It Holds

April 26, 2014 | About:
Analyse360Degree

Analyse360Degree

0 followers
It’s again the time of the year when tech companies start reporting their results and one name that everyone waits for the most is Apple (AAPL). The Cupertino based tech giant finally came out with its fiscal 2014 second quarter earnings very recently and what a quarter it has delivered! The company has given its stakeholders ample reasons to rejoice and also to worry less on losing market share concerns. Along with all this, Apple is also looking at a stock split and better returns to the shareholders.

Let’s take a look at what all the company has been up to and what the investors can look forward to.

A sneak-peek in to the quarter and its numbers

Every year the iPhone maker launches something new that drives its top-line and bottom-line across the year. Last year the company had launched the highly awaited iPhone 5S, followed by iPad Air, and many analysts were questioning if these will be enough to drive Apple’s growth this time also or not. It seems, they were concerned for no reason at all. Some were also a little shocked by the numbers and the decisions taken by Apple. Carl Icahn (Trades, Portfolio) even tweeted that he fails to understand the company.

The iPhone maker’s top-line surged 4.6% YoY as the company reported revenue totaling $45.6 billion, translating to a bottom-line of $11.62 per share, turning out to be better than even what the company has expected earlier. The numbers took the Wall Street by shock as it not only topped analyst estimates, but also topped the company’s guidance. The Wall Street was expecting Apple to report $43 billion worth of sales and an EPS of $10.18.

Like always, iPhones contributed massively (57.1%) to Apple’s wonderful top-line. The company sold as many as 43.4 million iPhone units during the period, way above the street expectation of 37 million. However, iPad sales took a beating and were lower than expectation at 16.3 million as against the anticipated 19.7 million, but still accounted for almost 20% of the total top-line. Even the Mac and iPod numbers were encouraging at 4.1 million and 2.7 million respectively. The company was also reported substantial increase in iTunes users which now stands at 800 million, up almost 40% since last year June.

What investors can look forward to

Numbers reported by the company are pretty encouraging. Along with that, Apple has also come out with the guidance for the next quarter. The company expects to report revenue between $36 and $38 billion; however this is lower than what the analysts thought.

The tech mammoth even has plans to give back more to its shareholders and for that it has announced its plans of increasing its stock buyback and a seven-for-one stock split. Apple was already in the process of buying back $60 million worth of stocks according to the previous pledge and now it will be buying back another $30 million of its stocks, pulling up the total buyback value to $90 million. Not only this, the shareholders will also receive better dividends as the company decided to raise the quarterly returns amount to $3.29 per share, resulting in an 8% increase.

Another point that the company announced which has raised much interest from investors and analysts is the stock-split decision. In the past nine years this is the first time that Apple’s board approved the seven-for-one stock split decision that will take place on June 2, 2014, and with this Apple shares will be available to a broader segment of investors. Industry experts are of the opinion that post stock-split the shares of the company will be more accessibly priced. Currently the stock is trading at $571.94 and taking the stock-split into account, the price per share will be reduced to $81.7, making it possible for more individual buyers to purchase more

Departing Thoughts

Apple surely rocked the stage with its fiscal 2014 second quarter results and this gives a huge boost to what can be expected from the company in the coming days. Apple has several strong products in its pipeline which are expected to hit the market this year and with these the company’s performance should shoot up substantially. Tim Cook in his statement said that Apple didn’t ship the first smartphone or the first mp3 player or the first tablet. But, Apple surely shipped the first successful smartphone, mp3 player and tablet and more of such things can be expected from Apple.

The company is offering investors, analysts and industry experts with what they seek in a stock – growth potential, strong product line-up, better return to shareholders and near to the ground institutional ownership – and all this makes Apple a must have for ones portfolio.


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK