by Ian Harvey
August 03, 2017
Apple Inc. (NASDAQ:AAPL)
Here is an overview of Apple Inc. after reporting earnings. This options trade was recommended on Monday, July 31, 2017, with the company reporting on August 01 after the close; producing major potential profits within a very short period of executing the trade.
The Suggestion……from "Earnings Predictions for the Week Beginning July 31, 2017"
The tech giant's June-quarter earnings report, due out after the market close Tuesday, is largely seen as a nonevent as investors increasingly focus on the September quarter and the expected launch of the iPhone 8.
However, Apple’s revenues will continue to be driven by the fast growing “Services” segment as well the sales (albeit slowing down) of iPhone 7 and 7 Plus. Services include revenues from App store, Apple Music and Apple Pay.
Option trade to consider: Buy the APPL Aug 18 2017 150.00 Call at approximately $3.40.
In its second quarter, Apple produced better-than-expected results, as well as growth in every one of the tech giant's product segments, highlighting a strong business with loyal customers.
Headed into the upcoming launch of its 10th-anniversary iPhone, Apple's business is well-positioned for sustained growth. Not only were Apple's fiscal third-quarter results exceptional, but Apple's guidance for its fourth quarter marked strong confidence from management about the company's future.
Apple's overall financial results were solid. Its revenue during the quarter jumped 7%, putting the company's streak of declining revenue last year further in the past. After returning to revenue growth in the first quarter of 2017, Apple's strong third-quarter revenue growth meant the tech giant's top-line growth has accelerated for three quarters in row. Apple's earnings per share also rose during the quarter, was up 17.6% year over year.
Apple's year-over-year expansion of its gross profit margin, from 38% in the year-ago quarter to 38.5% in Q3, was another good sign for investors. The metric is important for Apple, as it highlights the company's ability to charge premium prices and to leverage its economies of scale.
Both Apple's revenue and gross profit margin were at the high end of management's guidance range for the quarter.
Apple extended its streak of accelerating growth -- and management's guidance implies this streak will continue.
Apple's outlook for its fourth fiscal quarter of 2017 also showed evidence of the company's revitalized growth story. Apple guided for fourth-quarter revenue between $49 and $52 billion, representing year-over-year growth of 4.5% to 10.9%. The midpoint of this revenue guidance would represent a 7.7% rise in revenue -- a rate that would mark Apple's fourth quarter in a row of accelerating revenue growth.
Apple Inc.’s stock climbed above its intraday record high to $159.10 after the company reported better-than-expected iPhone sales, revenue and earnings per share. The Dow traded and finished above the 22,000 threshold for the first time on Wednesday, with sharp gains for Apple helping the blue-chip index to notch its seventh straight daily rise as the S&P 500 and the Nasdaq struggled.
Major indexes opened higher a day after Apple Inc. posted stronger-than-expected quarterly earnings and iPhone sales that met expectations. Its stock rose 4.73% and hit a record.
The tech giant is the market’s largest stock by market value, which means it has an outsize weight on the overall moves of all three major indexes.
The Dow Jones Industrial Average (DJIA) rose 52.32 points, or 0.2%, to close at 22,016.24, with gains powered largely by Apple. Earlier, the average touched an intraday high of 22,036.10.
Within four days this trade produced a potential profit of 193%!
ACTION TO TAKE
The results say it all!