When a realtor brags about the house's plumbing... walk right out the door. Now Apple's boasting in the first paragraph of its earnings about iPad and Watch sales — But they're just a sliver of company revenues. Overall, Apple's profits fell 16% because fewer people are upgrading to $1K iPhones (your $750 iBrick is still solid).
Cash hookups are rising... as sales are falling. Apple's got a case of "lack-of-iPhone-growth," so it distracted shareholders with goodies:
- The dividend is growing by 5% — Each quarter, Apple will wire almost $4B worth of company cash to stockholders based on the # of shares they own ($0.77 per share, to be exact).
- It'll spend $75B to buy back some Apple shares — That increases the value of all the other shares out there by removing some from the market.
- The result: Apple stock rose 5% Tuesday because investors will get cash hookups.
Apple's become a giant ATM... Even though business is shrinking, Apple has so much past and future profit that it's expected to surpass Microsoft today to become the #1 most valuable company again.
- The past: $225B in the bank from the good ol' iPhone days that it'll continue dishing out to shareholders as dividends + share buybacks.
- The future: 900M people use iPhones right now. And Apple will make more money by mooching services off them like Apple TV+, Apple News+, Apple Music, Apple Pay.
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