Apple Beats Estimates by Relying on Growth from Chinese Sales
- Apple Inc. 1Q EPS $3.28 vs the estimated $3.22
- Sales in China grew to $18.4B from $12.52B in 4Q
- CEO Tim Cook sees an economic slowness from China
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Tuesday saw a pivotal event risk with Apple Inc. first quarter earnings being on the docket. Besides three central bank rate decisions this week, the RBNZ ,FOMC and BoJ, Apple’s earnings report is considered a vital forerunner for global risk appetite.
The corporation posted a profit of $18.3 billion or an EPS of $3.28. Both figures surprised analysts’ forecasts of $18.1 billion in profit and $3.225 earnings per share.
Apple has been looking towards China for growth. The report noted that sales in the country grew to $18.4 billion for the quarter from the $12.52 billion in the fourth quarter of 2015. Financial news outlets were concerned that a stronger US Dollar and a waning Chinese economy may hurt Apple’s bottom line.
The iPhone contributed to the company’s increase in revenue. Sales from the product grew 60 percent quarter-over-quarter to $51.6 billion. The amount of units sold from Apple’s most popular item came in lower at 74.78 million as opposed to the consensus forecast of 75.0 million.
Apple’s stock price has been tracking closely with movements in the S&P 500. This has caused the institution to act as leading indicator for the market as a whole. Apple left investors with forward guidance into the second quarter’s earnings report by expecting revenue to be in the range from $50 to $53 billion. It may prove wise to watch the company’s data for clues on the overall direction of equities as well as a signal for the strength of the Chinese economy. CEO Time Cook said Apple is seeing economic softness in China.
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