In the wake of historic earnings, Apple now faces even greater expectations

“Never before has so much money been made by a single firm in such a short period of time,” The Economist writes. “On January 27th Tim Cook, the boss of Apple, announced that it had made $18 billion in its latest fiscal quarter, which ran almost to the end of December 2014. That beats the previous record of $15.9 billion reported by ExxonMobil, an oil company, in 2012, according to S&P Dow Jones Indices.”

“Chief executives rarely admit to being dumbfounded by their companies’ performance, but Mr Cook said it was ‘hard to comprehend’ the extent of the interest in Apple’s products,” The Economist writes. “Apple is the world’s largest company by market capitalisation as well as its most profitable. Strikingly, it has risen to greatness using a rather old-fashioned business model: selling highly desirable objects at fat gross margins, which hit almost 40% in the latest quarter. The tech industry has spawned numerous software-based firms, such as Google and Facebook, that don’t have to worry about shifting goods around, yet they make much less than the Colossus of Cupertino.”

“This still leaves the company with a headache other firms would die to have: its Croesus-like mountain of cash, which now stands at $178 billion — a figure that is greater than the market capitalisations of information-technology giants such as Intel and IBM. Apple, which has already spent billions of dollars on share buy-backs, will revisit its plans to return money to shareholders and discuss them in April,” The Economist writes. “Mr Cook can expect plenty of calls from activist investors before then, no doubt from their shiny new iPhones.”

Read more in the full article here.


  1. The only expectations that count are Apple’s own expectations of its products, that they be the best and satisfy their loyal users.

    The streets expectations fall by the roadside of reality that flagrantly show how much the street doesn’t have a clue.

  2. Expect something more insightful from the ‘Economist’, than simply regurgitating what is already fact; as for the activist investors knocking down Tim Cook’s door, would like to see any of them try, with the muscle power $179 billion war chest gives Apple Inc. The Share buyback program has kept the hedge funds very wary of shorting the stock too far, although we are still seeing some pump & dump prior to earnings, which of course Apple Inc. love, as it allows they to buy back another tranche of shares at a cheaper price!!

  3. With the current price of the stock around $117, $188B in cash and continual buybacks, there are not any great expectations priced-in. At the current price, expectations are the company will soon fail. $200 a share would reflect an optimistic view. $117 is a joke.

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