Apple Q2 - iPhone Dominates

Apple shares are up about a third this year, and they rose another 5% on Friday.

Apple is already the most valuable company on the planet. Revenues were an eye-popping $94.8 billion for the quarter while net profits were $24.2 billion. Analysts had predicted $93 billion in revenue and $22.6 billion in net profits.

Sales of iPhones accounted for 54% of total revenue at $51.3 billion, ahead of estimates at $48.9 billion. Tae Kim writes in this week's edition of Barron's magazine: "In a world where most technology products are commodities, Apple's customers are less likely to be swayed by discounts. It has a stellar brand, high customer satisfaction, and incredible loyalty".

The services division is now the most important driver of revenue growth. Apple has 975 million paying global subscribers, which has risen by 150 million in the past year, and doubled in the last three years. That part of the business includes App Store payments, licensing fees, music, movies and iCloud storage, and raked in $20.1 billion, 22% of Apple's total revenues. Note that this division has margins of 71%, versus 37% for hardware.

The all-time high stock closing price was $180.68 on 3 January 2022. That's just a little above Friday's close of $173.57. A number of Wall Street firms project the share price to rise above $200 soon.

Apple also announced a $90 billion share buyback plan last week. They have repurchased nearly $600 billion in shares over the past decade. They can't have mine though. I'm a holder! Hopefully, so are you.