Apple ‘wrong-foots’ analysts with latest earnings

Anthony Caruana
28 April, 2015
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Tim Cook, Apple CEO, earnings call, macworld australiaMarket analyst Ken Odeluga from City Index says Apple’s earnings call this morning has ‘wrong-footed’ most analyst predictions.

Many of the pre-call predictions focused on the effect of a strengthening US dollar and how it would push overall earnings down.

“Apple did experience the impact of the strong dollar, but it was diluted due to a higher than anticipated volume of iPhone sales,” says Odeluga.

CEO Tim Cook hinted at something slightly different in the pattern of iPhone sales momentum – faster take up than in the cycles of previous models. Unit sales for the iPhone were 61.2 million for the quarter – up 46 percent on the same quarter last year. Given the iPhone 6 was released last year and Samsung was buoyed by the release of its new flagship, the Galaxy S6, these results represent seem to reflect Apple is not only maintaining its market position, but increasing it and revenues at the same time.

Given the strong margins Apple reported – in excess of 40 percent – the strength of its share buyback program, rising dividends for shareholders and guidance range for Q2 that covers and slightly exceeds Wall Street consensus, Odeluga says, “It looks like we are seeing a company that is highly confident about the next few quarters.

“Apple’s penchant for agreeing with consensus a quarter in advance and then subsequently trumping expectations represents a pattern that’s likely to be continued in Q2,” he adds.

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