FUDS never adds up
Because the iPhone business is so large and works on a 2 year cycle, then Apple as a whole can only be viewed or measured that way.
15 months ago, when Apple reported it’s first full quarter of iPhone 6 sales, it reported the highest quarterly profit of any company ever, beating Exxon’s record by 13%.
In doing so it beat it’s own profit from the same quarter 2 years, i.e. one cycle, earlier by 37.4% or by 55.3% on a profit per share basis. Remember Apple’s primary way of returning cash to shareholders is not by dividends, but by share repurchase.
Last quarter, the 12 months on and the first report for a full quarter of the iPhone 6s sales, Apple again reported the highest company profit of any company ever beating its own previous record by 1%.
In doing so it beat it’s own profit from the same quarter 2 years, i.e. one cycle, earlier by 40.4% or by 48.3% growth in profit per share.
Yes, it’s years over year growth was only 1%. But 2 years earlier in the same quarter it was 0%. That’s just part of the 2 year cycle.
It looks like overall for the 2 year cycle iPhone 6 & 6s cycle, Apple’s earnings will be up about 40% or about 50% as profit per share, which annualises to about 18% or 22% profit per share. On top of that growth, Apple also pays a 2% dividend
How, on the basis of that, do you report Apple’s growth story as being over.
Of course Apple’s growth had been about to be over every year for at least the last decade, but has still managed 960% growth in that decade. If that sounds like it’s slowing then consider that 960% over 10 years annualises to 26.6% percent annual growth, and is about the same either as profit growth or as growth per share, as for the majority of the decade Apple’s share count was growing. Also, over most of that period, Apple was not paying out the 2% dividend that it currently pays.
Apple’s stock remains a growth stock. The growth certainly hasn’t plunged. And now it pays a dividend too.