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Apple Did It Again, But With a Pinch of Salt!

August 05, 2014 | About:
Suravi Thacker

Suravi Thacker

1 followers

The most loved mobile device maker, Apple (AAPL), seems to not be tired of anything, including resonating with customers as well as surprising its investors. It continues to give customers a lot of reasons to buy its products, which has always helped in delighting its investors.

The company’s recently reported third quarter results, which came in ahead of the Street’s estimates. This led to an increase in its share price. In fact, its share price has risen 20% since the beginning of the year. Let us check on what’s happening.

Customers go gaga over its products

Revenue surged 6% to $37.4 billion, over last year. Although this was slightly lower than the estimate of $37.98 billion, what is commendable is the fact that Apple could register growth despite factors such as new product introduction due in the coming months. Usually, this leads to lower sales since customers delay their purchases and wait for the new launch.

Going by unit sales, the smartphone retailer sold 35.2 million iPhones during the quarter, a jump of 13% over last year. Also, it is better than the analysts’ expectation of 35 million iPhones. However, sale of iPads was a laggard. iPads moved slower than expected as its sales declined 9% to 13.3 million units.

Nonetheless, Apple’s results got even more impressive as people got to the bottom line. Its earnings stood at $1.28 per share, an increase of 20% over last year. Also, this was higher than the expectation of $1.23 per share. Further, gross margin expanded to 39.4% from 36.9%, in the prior year’s quarter. This was indeed a commendable climb, which delighted the investors.

The peer’s story

Rival Samsung posted poor earnings with 10% drop in sales and 18% decline in the bottom line. The South Korean mobile maker is facing stiff competition from other Chinese players, which are smaller in size but their cheaper phones are attracting customers. Therefore, its market share is under pressure. Nonetheless, the company is making efforts to revive sales. It plans to launch new bigger size screens in the coming months. It will also introduce new high end models as well as phablets, a hybrid of phone and tablets. These products should help the company revive its sales.

Apple’s strategies

Even Apple is up for some great moves which should help in boosting its sales. It has announced its plans to launch the new Mac software, iOS 8, in the coming months. Also, it will introduce OS X Yosemite along with a new programming language called Swift. This is in addition to the most awaited iPhone 6, which is slated to be launched soon.

In fact, the company has recently brought new products such as a new low cost iMac at $1099, early this year. This should attract middle income group people, especially in the emerging markets. Also, the launch of CarPlay is also being looked forward to as people have started adopting it.

Conclusion

Apple is known for innovation as it continues to bring in new products for its customers. Its endless efforts to make life easy are remarkable. Further, the awaited new products should help in luring more and more customers to its stores, enabling it to outpace its biggest rival. Its bright outlook and a decent quarter, makes Apple a good pick.


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