Apple’s $300 billion rebound faces reality check with earnings

“Apple Inc. has a lot to live up to with its earnings report coming on the heels of a rally that has added almost $300 billion of market value this year,” Jeran Wittenstein writes for Bloomberg. “The shares are up 43 percent from a 21-month low touched in early January after worse-than-expected iPhone sales prompted the company to cut its fiscal first-quarter revenue forecast.”

“Poor iPhone sales in China were a big reason Apple cut its forecast in January. Investors are keen to know if trends in that critical region have improved,” Wittenstein writes. “With iPhone sales shrinking, investors have become increasingly fixated on services revenue, which continues to grow quickly. Wall Street is anticipating sales of $11.2 billion in the fiscal second quarter, up 22 percent from the same period last year, according to data compiled by Bloomberg.”

“Apple has traditionally updated its capital-return plans with the fiscal second-quarter earnings report,” Wittenstein writes. “This time, Apple could add as much as $100 billion to its share repurchase authorization and raise its dividend by as much as 16 percent, according to Loup Ventures’ Gene Munster.”

Read more in the full article here.

MacDailyNews Take: Here’s a real reality check: That $300+ billion should have never been shaved off to begin with (as anyone who looked past knee-jerk analysts, anti-Apple pundits, and panicky mom & pops to see the fundamentals knows). And, hey, we’re not complaining: Any deep AAPL discount sale that the irrational Mr. Market wants to run is always fine with us accumulators!

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1 Comment

  1. I guess people forget the fact that Apple had reached a $1.1T market cap late last year and that’s why they keep talking about the gains (after a $450B collapse) Apple has made this year. It’s so weird. Meanwhile, Microsoft soared right past Apple without any muss or fuss and looks to keep holding that lead thanks to an unlimited growth cloud business.

    What’s even stranger is how Facebook is worth around $550B in market cap and it doesn’t produce anything. All Facebook has to do is continue siphoning free personal data from consumers and it’s going to be easily worth more than Apple at this rate. Compared to Facebook, Apple is truly spinning its wheels and its no wonder Tim Cook is always trying to attack Facebook’s security and privacy failings. However, Facebook users don’t care and the Feds can’t touch Facebook so the company’s revenue continues to grow at a ballistic rate. So, Apple is doomed and Facebook isn’t. How strange is that?

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