Apple, which Real Money’s Stephen Guilfoyle calls, “the greatest consumer electronics company of all-time,” released the firm’s fiscal fourth quarter results on Thursday night. Apple shares promptly sold off in response.
For the firm’s fiscal fourth quarter, Apple reported EPS of $0.73, beating the street by three cents, on revenue of $64.69 billion. The revenue print was good for growth of 1%, and easily beat consensus view.
Now, we already know iPhone sales missed. Does that not make sense though? Ahead of a highly publicized launch of the next generation 5G capable iPhone 12’s (four varieties). I think it does. Away from the iPhone line, the rest of the firm’s product lines all handily grew (25% in aggregate) and beat projections. We’re talking iPad, Mac, Wearables and Home Accessories. They all beat.
The real story for me is in services, still… The group beat expectations and continues to grow. That said, even now, with Services accounting for 22% of sales, the higher margin unit provides 39.4% of gross income. Hmm. Gross margin for the entire firm landed at 38.2%. For services… 66.9%, for products… 29.8%. This is the main reason why markets have over the past year and change, assigned a much higher multiple to the equity in terms of valuation.
In short… buy this dip. No, don’t buy the markets. There’s a national election next week. Just buy some Apple on the dip. The firm had a better quarter than you think, and is set up for accelerated success in the future.
MacDailyNews Take: Sound advice.