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Apple: Nibbling At The Edges For 10% To 14% Yields

Published Fri, 08 Nov 2019 09:15:00 -0500 on Seeking Alpha

Apple (AAPL) has been on a royal tear this year, rising 63% so far in 2019, vs. 22.88% for the S&P 500 and ~37% for the Technology Select SPDR Fund:
Earnings:
Fiscal Q4 '19, (period ending 9/30/19), revenue growth was 1.81%, a bit higher than fiscal Q3 '19's 1% revenue growth. Net income declined -3.11%, while diluted EPS rose 4.12%.
Gross margin $ had a ~1% rise, whereas gross margin % was slightly lower:
Looking at the entire fiscal year shows revenue down ~-2%, net income down -6.7%, with diluted EPS up .68%. AAPL's huge share buyback program decreased the share count by -6.56%, which, of course, aided EPS growth. Gross margin $ fell by -3.39%, while % margin slipped by -1.37%.
Segments:
During fiscal year 2019, AAPL's largest segment, iPhones, had a 12.28% sales decline of ~$20B. While that's a huge number, the remaining segments all had sales growth, with Wearables at 40.85%, Services at 16.45%, iPad at 15.78%, and Mac, at just 2.14%. With the growth in these other segments, the total segment growth $ decline was ~$2.93B.
A glass half full viewpoint of this would point out that AAPL had a more diverse sales mix in fiscal 2019 than it did in fiscal 2018. It will be interesting to see how the 5G iPhone affects the sales mix when it comes out in 2020.
Analysts' Earnings Estimates:
AAPL has had 26 upward estimate revisions during the past three months, vs. 12 downward revisions.
The average EPS estimate for fiscal year 2020 is... Read more