Apple Once Again Smashed Expectations and Embarrassed Critics

Apple (AAPL) jumped nearly 7% in Friday's intraday trading after reporting quarterly earnings that easily beat expectations, despite supply constraints, and easily posted one of its best quarters in years. The Cupertino, California-based Apple said it earned $2.10 a share on $123.95 billion in revenue, led by strength in the iPhone sales, which generated $71.6 billion during the quarter. The consensus expected the company to generate $67.5 billion in iPhone revenue during the quarter. A consensus also estimated the company to earn $1.89 a share on $118.4 billion in revenue during the quarter.

Services revenue rose to $19.5 billion in the quarter, up from $15.7 billion in the year-ago period. Also aiding the quarterly results was strength in the Mac and Wearables divisions, with Mac revenue coming in at $10.85 billion, compared to $8.68 billion in the year ago period.

Apple's Wearables unit, which includes the Apple Watch and AirPods, generated $14.7 billion in revenue during the period, up from $12.97 in Q1 2021.

Only two of the hi tech bluechips, Tesla (TSLA) and Apple (AAPL), keep surprising even the most optimistic investors, quarter by quarter. Apple’s bottom-line growth remains impressive. For a company of Apple’s size, 25% EPS growth doesn’t come easily, and Apple achieved it even with the above mentioned supply chain problems costing it approximately $6 billion.

Apple’s market shares in some of its markets include:

● 15% in smartphones globally (second after Samsung).

● 13% in personal computers in the United States.

● 56% in tablets (first place).

● 52% in smart watches (first place).

● 15% in music streaming (second place).

Although Apple’s P/E ratio is currently about 28, which is higher than that of some FAAMNG stock rivals, for example, Meta Platforms (formerly Facebook (FB)) and Google Alphabet (GOOG), extraordinary sustainability of Apple’s business and its unabated and iconic consumer appeal makes Apple an outstanding company deserving this kind of valuation premium.