Apple Q2 earnings beat estimates, despite falling iPhone sales as they were expected to make $1.39 per share of revenue on $42.1 billion. The bottom line is that Apple was able to satisfy those who weren't as optimistic about themselves and they saw stronger customer demand and business performance than they anticipated.
Here are some of the highlights:
-iPhones: 40.39 million, down by 21 percent on the year-ago quarter
- iPads: 9.95 million, down by 3 percent on the year-ago quarter
- Macs: 4.25 million, down by 11 percent on the year-ago quarter
- Services (which include iTunes and Apple Pay): $5.97 billion, which is flat compared to the year-ago quarter.
- Other products (accessories and Apple Watch are included, but not broken out separately): $2.2 billion, up 1 percent on the year-ago quarter
The stock is back above $100 as well as App Store sales growth of 37% YoY which is accelerating for the fourth consecutive quarter. Services and apps are becoming a bigger and bigger factor for the stock and more people are beginning to realize that.
When listening to Apple bulls, they tend to agree that the quarter will bring up many concerns for Apple, but will also mark a bottom for the stock. They also expect iPhone sales will become more firm and investors will focus more on apps and potential future movers like auto and subscription services. Most bulls have upgraded ratings and price targets.
On the other hand, Apple bears fear that there is too much risk in the upgrade rate for the next iPhone. In addition, some do not wholeheartedly agree with Apple's positioning for new revenue streams. In a sense, this quarter's results are not much to get excited about given the lack of new product sales that are releasing this year. Bears also point to areas where Apple has no presence in (streaming video, content, advertising and VR) alongside not a great software. Popular bearish belief also points to the company plateauing under new CEO Tim Cook.
So what's in the cards for Apple? Thoughts?