Apple is the world's largest company by market capitalization; so naturally when they take a loss, it's going to be a big one! Well, that's exactly what happened yesterday after hours when the company released its earnings report. Today, we'll talk about the details of the earnings release, how investors reacted, what we can expect to see moving forward, and how binary options traders can benefit from the trends. So, let's get right to it…
Apple's Earnings Report
As mentioned above, Apple released its earnings report yesterday after the bell. At first glance, earnings seemed great as the company beat earnings expectations. Here's what we saw…
Earnings Per Share – For the quarter, Apple reported earnings per share at $1.85; $0.04 higher than analysts expected to see.
Top-Line Revenue – Top-line revenue came in lower than expected. While analyst expected this figure to come in at $49.81 billion, Apple only generated $49.6 billion in the quarter.
While these figures may seem overwhelmingly positive, investors found an issue with the amount of iPhones sold in the quarter. That figure came in at 47.5 million. Analysts expected it to come in at 48.8 million. Also, investors are concerned about the sales of the Apple Watch; a figure that was simply not offered in the earnings report.
How Investors Reacted To The Report
It was clear that investors weren't happy with what they were seeing immediately after the report was released. Within hours, Apple's stock sold off so much in after hours trading that it's market capitalization fell by around $60 billion. Today, Apple closed at $124.99 per share; a loss of $5.76 per share or 4.41%.
What We Can Expect To See Moving Forward
The bottom line from the earnings report is the fact that Apple was a victim of its own success. Given growth in previous quarters, analysts expected a lot from the company this quarter. Although their sales in China did climb dramatically, they simply couldn't reach growth expectations elsewhere with regard to the iPhone; leading to a flurry of upset investors. Nonetheless, I'm still incredibly impressed with the earnings report personally. To be honest, I expected a miss on the exorbitant iPhone numbers analysts were expecting. Nonetheless, the company came out ahead on earnings; an incredible feat in my opinion.
With all of that being said, I'm expecting good things from Apple moving forward. While the stock was hit hard by the earnings release, this is a stock that has overcome adversity; and there's no reason they can't do it now.
How To Benefit From The Trends
Apple stock fell dramatically as a result of earnings. However, earnings overall were positive. With that said, I'm expecting Apple to bounce back and continue the growth trend we've seen. With that said, binary options traders should look for support and ride the uptrends with call options to earn a profit.
What Do You Think?
Where do you think Apple is headed and why? Let us know in the comments below!