Apple shares up after earnings revenue beats estimates

Apple stock rises in US after hours trading after a mostly positive Q1 earnings report.

Apple logo after Apple Q1 results Source: Bloomberg

Apple stock is up in US after hours trading after beating earnings and revenue estimates in its first quarter (Q1) earnings results. Apple's revenue barely beat Wall Street predictions.

Apple earnings: key figures

Earnings per share $4.18
Revenue $84.3 billion
iPhone revenue $51.98 billion
Wearables revenue $7.31 billion
Services revenue $10.9 billion

Apple earnings

Apple's revenue was projected to be $84 billion after weak Q1 guidance from chief executive officer (CEO), Tim Cook. However, Apple revenue topped $84.3 billion. Apple's earnings per share (EPS) barely passed expectations with EPS at $4.18, slightly more than the $4.17 predicted by financial experts.Cook revealed that this is the last earnings report when the corporation will report iPhone unit sales numbers, and possibly with good reason. The iPhone revenue decreased to $52.98 billion, a 15% decline. Cook attributed the downward slide in iPhone sales to customers not upgrading to new devices every year. He also blamed sluggish global sales on an economic slowdown in China.

'Our customers are holding on to their older iPhones a bit longer than in the past. When you paired this with the macroeconomic factors particularly in emerging markets, it resulted in iPhone revenue that was down 15% from last year,' said Cook.

While iPhone sales worsened, Apple's revenue in services like Apple Pay, increased by 19% and earned $10.9 billion, more than the projected $10.87 billion. Cook detailed the positive and negative aspects in Apple's profits report.

‘While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide. Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our Services business to new records thanks to our large and fast-growing ecosystem,'said Cook.

What do Apple's Q1 results mean for their share price?

Apple's Q1 results will likely mean a surge in its share price of $154.68. In after hours US trading, Apple's share price has already jumped to $161.06. Apple's revenue increase will also likely mean another increase for its share price over the next few days or even weeks. The share price was previously falling after facing bad publicity for iPhone bugs in which users can hear audio on the FaceTime feature before a call is completed to another person. With this positive earnings report, Apple's share price can probably withstand any news about glitches in its products.

How do Apple's Q1 results compare to other tech stocks?

Apple’s Q1 results are better than Netflix who had an earnings revenue miss. Apple’s profits could be a good harbinger for Facebook and Amazon, whose earnings reports are due this week. Apple’s stock was down, but since beating Q1 estimates, other tech stocks could overcome negative stock projections and have positive revenue results as well.

What is Apple's dividend forecast?

Apple’s dividend forecast was in line with financial experts’ expectations of $58.83 billion. Apple is expected to have an EPS between $2.13- $2.51 for Q2. Apple’s Q2 revenue is projected to be $55-$59 billion. Apple exceeded earnings expectations, but just barely. It remains to be seen how the global slowdown in China and other external factors will affect the future earnings reports of other corporations this week.

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