What Apple Omitted From Their Earnings

Not all earnings seasons are alike.

In the age of COVID-19, social distancing and self-editing our lives to be more pandemic friendly… very few industries are immune to the devastating economic impact of the virus.

Bankruptcies are soaring.

Yet the technology sector has been a safe haven.

Telehealth, for example, is growing faster than any industry in history.

Biotechnology companies have thrived as the crisis deepens, as well.

Firms helping to advance artificial intelligence also continue to shine.

Companies developing and enhancing the cloud are showing strength, too.

And since downturns always trigger cost-cutting measures, like the implementation of automation and robotics, those industries are attracting huge investment dollars.

The poster child, however, for thriving in a challenging new world is Shopify.

Launched over 10 years ago as an online retailer of snowboards, Shopify now runs an e-commerce platform that allows anyone to set up a digital storefront and sell their products or services… from manufactured goods to ballet lessons… plumbing jobs to country club memberships… rental properties to life coaches.

Pretty cool, right?

A quick look at Shopify’s chart shows the price moving aggressively higher — from $430 on March 30 to over $1,030 as I write.

Talk about an earnings beat…

Shopify reported second-quarter adjusted earnings of $1.05 per share, annihilating analysts’ expectations of $0.01 per share. When earnings clock in at 10,000% above expectations, it’s no wonder shares are rocketing to the moon.

Speaking of earnings, Amazon and Apple both reported yesterday.

Who won the earnings war between the two tech juggernauts?

Shopify’s resounding second quarter would seem to favor Amazon over Apple, as the two companies have similar business models.

Yet Apple is consistently viewed by investors in a much more positive light, and CEO Tim Cook has a knack for making exciting announcements.

Let’s see how they fared.

Amazon’s Blowout Quarter

To no one’s surprise, Amazon exceeded Wall Street’s expectations across the board.

Analysts were anticipating earnings of $1.48 per share.

But on the strength of a 40% increase in revenue, Amazon delivered $10.30 per share.

Amazon’s purchase of Whole Foods is paying off, too — with online grocery sales tripling from a year ago, leading to a decision to increase grocery delivery capacity by more than 160%.

Revenue from Amazon’s cloud computing unit, Amazon Web Services, ratcheted 29% higher.

Amazon’s downsides are twofold… 1) Amazon is running out of space to stock inventory, and 2) tensions continue to mount between management and its warehouse staff — mostly due to COVID-19 working conditions.

Amazon is up 5% since its earnings announcement.

Grade: B+

Apple Announces a 4-1 Stock Split

Well, so much for logic.

With 30 million people currently collecting unemployment insurance… news that the U.S. economy shrunk at a 32.9% pace, setting an all-time record for futility… and the fact that Apple sells high-end, luxury tech devices…

You’d think Apple might report a clunker of a quarter.

Yet Apple had its best third quarter ever in terms of revenue.

The boom wasn’t thanks to iPhone sales, though, which only grew by 1.6%. Apple’s home run quarter was driven by double-digit sales increases for iPads, Apple Watches and AirPods.

But Apple’s announcement of a 4-1 stock split… along with plans to give shareholders three additional shares per share already owned… stole the show.

According to CNBC, “Apple’s stock split is the company’s fifth in its history. It previously split on a 7-1 basis in 2014, and a 2-1 basis in 2005, 2000 and 1987.”

Stocks tend to outperform the market in the year following a stock split.

Apple is up 6% since its earnings announcement.

Grade: A

I’m incredibly bullish on Apple.

Yet my enthusiasm has nothing to do with iPhones, iPads, Apple Watches or AirPods.

Because right now I believe Apple is preparing to reveal its biggest product to date…

And we’ve got the $8 billion receipt to prove it.

If you’ve missed out profits from the iPad launch… the iPhone… and the iPod launch…

Here’s your chance to catch up with HUGE profit potential.

Onward and upward,

ray

Robert Williams

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Robert Williams

After nearly 20 years in the trenches of high finance, Robert has joined St. Paul Research to assume the role of Chief Futurist. Robert cut his teeth as an analyst for one of the most revered and prestigious medical institutions on Earth, whose endowment is valued at $4.3 billion. From there, Robert became the lead...

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