The stock market opened Wednesday on an up note, in part due to Apple earnings that turned out to be better than expected. Analysts had predicted a September earning of $1.88 per share, but earnings were up at $1.96 at the closing bell on Tuesday night.
Sales to the hungry Chinese market have bolstered Apple shares as their fourth-quarter earnings rose $11.12 billion, which is $2.6 million over last year’s fourth quarter. Overall annual revenue was up 22% at $51.50 billion.
Apple iPhone Fueling Record Fourth Quarter Sales
Sales of the company’s popular iPhone have been partially fueledthe Apple earnings increase in stock price.
After just three days of sales on Sept. 28, Apple announced that over 13 million iPhone 6s and 6s Plus had already been sold, and they were still 130 countries waiting for their release. The new phone has only been on the market for about a month and with the holiday gift giving season approaching, unit sales are expected to greatly increase.
Majority of Analysts Say Apple Earnings Will Remain Solid
There are some in the market who will say that Apple is becoming one of those companies that is getting too big and they are going to lose market share simply because of market saturation. Some also point out that in regard to Apple, the sale of the iPad tablet has decreased 20% and the iPhone is their only moneymaker.
However, most analysts agree that the company will continue to move forward and increase in earnings potential. Among the many reasons Apple earnings will continue is the innovation the company continues to push with new products.
Among other reasons for the rosy outlook include that a majority of iPhone users haven’t upgraded to the new 6s yet and penetration into the Chinese market is just beginning.
The new iPhone 6s also has little competition in the high-end smartphone market and already around 14 million people have switched from their Android phones to the new iPhone OS. The new iPhone offers a larger, easier to read screen and some software that Android doesn’t offer, and apparently users want.
Apple Cash on Hand RemainsSubstantial
According to Market Watch, many like to make analogies for the amount of cash Apple has on-hand. One states that if the company went to the bank and removed all the cash in twenties, they could be stretched end-to-end to the moon and back two times. Another notes that the $205 billion cash the company has on hand is more than the market value of Walmart, Bank of America, and Disney.
At least through the next company quarter, it appears that Apple earnings will continue to grow as they will include sales from the holiday buying season.
