Apple Inc.

 

 
AAPL Details
 
Record for Revenue from Service: Apple Inc. (NASDAQ: AAPL) is a US based multinational technology company which is engaged in designing, manufacturing, and marketing mobile communication and media devices and personal computers, and sells a variety of related software, services, accessories and third-party digital content and applications.
 
Recent Announcements:The Board announced a cash dividend of $0.77 per share of the company’s common stock, and the payment date was 15 August 2019. The company will discuss its fourth fiscal quarter result on Wednesday, 30 October 2019.

Final Cut Pro X Update Introduces New Metal Engine: The company updated the Final Cut Pro X with a new metal engine that delivers the performance gains throughout wide range of Mac systems and takes advantage of the tremendous power of the all-new Mac Pro and the high-resolution, high-dynamic-range viewing experience of Apple Pro Display XDR.

Apple Awards an Additional $250 Million To Corning: The company announced that it is awarding $250 million to Corning Incorporated from Advanced Manufacturing Fund. Corning Incorporated happens to be a supplier of precision glass for iPhone, Apple Watch and iPad. This will help to develop groundbreaking new glass innovations and would also help in expanding the manufacturing capabilities of Corning.

FY19 Financial Performance: During the quarter ended 30 June 2019, the company has returned more than $21 billion to its shareholders, including open market repurchases of 88 million shares of Apple worth $17 billion and $3.6 billion in dividends and equivalents. The company’s revenue went up by 1% on the YoY basis to $53.8 billion, Americas being the highest reportable segment with the revenue of $25,056 million while Rest of Asia Pacific reported the lowest revenue of $3,589 million.

The robust results of the June quarter were on account of the record revenue from services, accelerating growth of wearables, robust performance from iPad and Mac as well as significant improvement in iPhone trends. Of the total net sales, iPhone contributed $25,986 million while Mac and iPad made the contribution of $5,820 million and $5,023 million, respectively.

 
Financial Snapshot (Source: Company Reports)

During the quarter, the term debt (non-current) of the company was decreased to $84,936 million as at June 29, 2019 from $93,735 million as at September 29, 2018.

Outlook: The company provided the guidance for the fourth quarter of fiscal 2019 wherein the revenue is likely to come in the range of $61 billion - $64 billion whilst the gross margin is expected to be in the range of 37.5% to 38.5%. The company expects operating expenses to be in the range of $8.7 billion and $8.8 billion along with the tax rate to be approximately 16.5%. 

Stock Recommendation: EBITDA margin for AAPL stood at 26.9% for the quarter ended June 2019 as compared to the industry median of 11.2%, indicating good financial health and stable earnings of the company.The net margin of the company was 18.7% for June 2019 quarter, higher than the industry median of 4.4%, reflecting the company’s capabilities to convert its top-line into bottom-line. Apple’s new iPhone models have been on sale, which might support its top-line growth, moving forward. Currently, the stock is trading close to its 52-week high level of $229.93.

Considering the aforesaid facts, we recommend a “Hold” rating on the stock at the current market price of $224.4, down 1.17% on October 8, 2019.
 
 
 AAPL Daily Technical Chart (Source: Thomson Reuters)

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