Apple shares leap to new highs this morning in the regular session and then scooted higher in after hours trading after the company revealed better than expected 4th quarter earnings and sales of iPhones.
The shares ended at a record $US168.11 in regular trading, and then surged by more than 3% in after hours trading, to trade around $US173 at 8am Sydney time on Friday. At the regular close, Apple was valued at a $US868 billion. A 3% rise in Friday trading on Wall Street would lift the company’s value past $890 billion and close to $US900 billion.
Apple said its iPhone sales topped market forecasts in the September quarter and point to a stronger-than-expected end to the year in the current first quarter for the company, on the eve of Friday’s iPhone X launch, sending its shares to a new all-time high in after hours trading.
The bullish outlook from the world’s most valuable company points to what is likely to be another all-time record for US company profits in the current December quarter. Apple stock jumped by 3.5 per cent after-hours to $174.
In an interview before the results release, Apple finance chief Luca Maestri said that Apple is “very happy” with manufacturing supplies of the new iPhone X, which is already starting to go on sale in Australia and some Asian markets. “Our production is increasing every week,” he said, adding that delivery estimates for people who have pre-ordered the iPhone X might receive their devices sooner than previously expected “because the ramp is going well”. “Now do we know when the demand curve is going to intersect with the supply curve? Frankly we don’t know,” The Financial Times reported. Apple CEO, Tim Cook gave an interview of his own to the Wall Street Journal ahead of the earnings release.
Revenues for Apple’s fiscal fourth quarter, which included the launch of the iPhone 8 at the end of September, were up 12% to $US52.6 billion compared to the 4th quarter of last year.
It sold a total of 46.7 million iPhones in the quarter, up 3% year-on-year and just ahead of market forecasts, despite concerns that the iPhone 8 had seen lacklustre demand.
Earnings per share rose 24% to $2.08. With all eyes on the iPhone X launch going into the US and European (and Australian) holiday sales season, Apple provided an upbeat revenue forecast ranging between $US84 billion-87 billion.
That’s growth of around 11%, at the top end of the range, compared with last year’s $US78.4 billion.
Apple’s services revenue hit a new all-time high of $US8.5 billion for the fourth quarter, up 34%.
Apple said it had also returned to growth in China, where Mr Maestri said the iPhone had gained market share. Japan was the only market were sales fell, Apple said in its release.
Apple said it had cash on hand of $US268.9 billion, but with $US97.2 billion in long-term debt. Their net cash position is more like $US170 billion.
The surge in the Apple share price will no doubt please Warren Buffett whose Berkshire Hathaway is now the tech giant’s single largest shareholder with well over 133 million shares worth more than $US23 billion. Berkshire is due to release its third quarter report after trading closes early tomorrow morning.
