Apple Beats Wall Street Estimates

By Moris Beracha.- 

The company led by Tim Cook beat Wall Street Bull’s expectations and showed that, despite the negative forecasts, maintains its market technology dominance.

When everyone believed that Apple’s leadership in the technology market was overtaken by other companies such as Samsung and Huawei, this giant thumped on the table to report its financial results for the fiscal year. The company led by Tim Cook beat Wall Street Bull’s expectations and showed that, despite the negative forecasts, maintains its market technology dominance.

Apple posted a net profit of 11.5 billion dollars for the second quarter, or a 32% increase over last year. This helped the company’s shares to rise 3% in a single day and created moments of surprise when it pushed its market cap to $1 trillion, becoming the first company hitting this milestone on Wall Street, as reported by the media.

The answer lies in the company’s business strategy

In short, Apple has an EPS (Earnings per share) of $ 2.34, easily topping Wall Street’s forecast of $ 2.18 for this quarter. In this way, the company posted a revenue of $53.3 billion, an increase of 17% in the last 12 months.

The question is how Apple’s profits increased over 30% despite the company’s flagship product, the iPhone, dropped in sales. The answer lies in the giant’s audacity, knowing that the consumer technology market is evolving faster and faster.

Cook’s team realized that iPhone’s design and technological advance improvements take longer than desired to move forward. Therefore, they focused on fueling fast-growing sister projects that rely on Apple technology.

Even though the market expects the traditional release of the new iPhone model this year and Apple is planning to launch three new iPhones for different targets, the new strategy of the US-based company is not focused on these products. High-profit expectations for the fourth quarter of 2018 and the secret of the company’s financial results were driven by empowering people with breakthrough services such as Apple Music, iCloud storage, and Apple Store, among others.

What makes Apple a company beyond profits? The answer lies in the business strategy embraced by the company. It has not been a surprise for Apple that Huawei is overtaking it in mobile phones sales. Surely, this growth could be estimated for some time.

This fact did not push Apple’s creative team and managers. It was rather the ability to see the comparative advantages of its services segment developed over time that have shown organic growth quietly, as the sales of the company’s iPhone.

The ability to see and meet the market needs over time, or rather the strategy of creating consumer needs inevitably leads to investment and growth in parallel and dependent businesses. Hence, this is the magic formula of this giant who, despite the drop in its phone models’ sales, today strongly welcomes having beaten Wall Street estimates.

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