Tim Apple Is Doing An Amazing Job

Tim Apple Is Doing An Amazing Job

Apple delivered another strong quarter on Wednesday afternoon. Color no one surprised.

Sometimes, it’s hard to know whether it’s worth documenting earnings from America’s tech oligopoly.

On one hand, it would be absurd not to at least highlight the… well, the highlights. After all, there’s a very real sense in which they are the market (figure below).

Charting net income margins paints a similar (albeit less dramatic) picture.

On the other hand, every quarter is just a compendium of large numbers. Sure, each FAAMG member has key metrics that matter to analysts, but generally speaking, the releases are just line item after line item documenting how many billions of people engaged with this or that feature, service or gadget — and how many billions were made on those interactions.

Alphabet and Microsoft fit that description on Tuesday. On Wednesday, Apple said revenue jumped 54% YoY to $89.58 billion. That was ahead of the most optimistic estimate. The range was $69.82 billion to $83.19 billion. iPhone revenue rose 66%. Mac and iPad sales were up 70% and 79%, respectively. If you’re going to work (and play) from home, you need devices. And Tim Cook delivered them — supply chain issues be damned, apparently. At $16.90 billion, services revenue handily beat estimates too.

“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us,” Cook said. “Apple is in a period of sweeping innovation across our product lineup, and we’re keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world.”

As I put it, speaking on behalf of Alphabet and Microsoft earlier this week: “You need us.” That’s the message to the world from America’s tech giants. Posed as a question: “Where would you be without us?” They (the companies) could pose the same question to investors.

It’s worth noting, as Goldman did last month, that “it’s not unusual for the market to become dominated by a new and economically transforming industry, or for market concentration of stocks to rise when a few companies come to dominate a fast-growing industry.” The figures (below, from the bank) help make the point.

“The biggest sector throughout history has typically reflected the main drivers of the economy at that time in each case, and often in the past the dominant sector has enjoyed a bigger market capitalization than today,” Goldman went on to write, in the same March note.

Cook continued on Wednesday, boasting of “the all-new iMac and iPad Pro, 8 gigawatts of new clean energy and our $430 billion investment in the US over the next five years.”

The company also upped its dividend and increased its buyback program. “We are confident in our future and continue to make significant investments to support our long-term plans and enrich our customers’ lives,” CFO Luca Maestri remarked.

As a reminder, Apple was coming off a $100 billion revenue quarter.

Obviously, the outlook is bright, although the company gave no guidance. As alluded to above, they really don’t have to. The results will be good. “Big league” numbers. “Tremendous” sales. “Tim Apple is an example of someone who’s done an amazing job. He’s being recognized more and more, I noticed.”


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