Apple’s Mixed Earnings Report

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Apple earnings report 2017

Apple had an earnings call to report on their first quarter of 2017, and the short version is that the company beat all expectations on profit and revenue, so the stock is up in after-hours trading.

However…

The company’s sales forecast for January through March this year did not quite meet the estimates of Wall Street analysts. So the bump in share price is not quite as high as you might otherwise expect, and it might not last very long.

This is particularly true since the company’s gross profit margins shrunk during the last three months of last year, causing net income to decline, as well.

Overall, though, it’s hard to deny that Apple is still an amazingly healthy company. CEO Tim Cook said that the App Store is up 43% for this quarter, and new payment systems will continue to bring more revenue growth.

He even teased the possibility of expanding content, as someone raised the possibility of Apple buying Netflix, and threw in a mention of future plans for Apple TV as a platform.

That would be a huge development. With Netflix getting awards for its original programming and an Amazon movie receiving an Oscar nomination, the possibility of Apple getting into the content game opens up a whole new area of growth and revenue generation.

Cook noted that the stronger dollar is hurting sales overseas, and that’s a huge part of Apple’s market. Apple has a mind-boggling $246.1 billion dollars in cash and equivalents at the moment, 94 percent of which is contributed by customers outside the United States. The company can literally do anything it wants in the way of expansion.

In any case, after three quarters of declining sales, it was demand for the iPhone 7 that drove sales to deliver record breaking revenue, so analysts should be happy about that. It was the one factor they kept saying marked the doom of Apple. Now we don’t have to listen to that anymore.

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