Apple reported on Tuesday stellar earnings that far exceeded Wall Street projections for the tech industry behemoth. The numbers that Apple has provided are reminding some of the 2012 blowout that was experienced. This year there were some doubts about whether the iPhone could sustain the successful earnings that it has managed so far. This report would suggest that the iPhone did just fine.
The companies gross margin swelled to record highs. The stock increased from $300 in January to $700 in September and with 2015 just now underway, there are no signs of slowing. Its EPS for the first quarter of the 2015 fiscal year rose 48 percent from last year to $3.06 while total revenue increased 30 percent to $74.6 billion. These two numbers were much more than Wall Street thought Apple would fetch. According to FactSet the company was estimated to have an EPS of $2.62 and their revenue was evaluated to reach $67.5 billion.
In light of Apple’s stellar earnings, investors are admitting they were not expecting such ample growth. Some are attributing this surprise to the company’s “lowballing” its projections due to the natural uncertainty of how tech industry items similar to that of the iPhone can either surge in popularity or be received somewhat more modestly.
Investors agree that this is one of the most iconic stock companies and its high-growth is undeniably attractive. There are other stocks though, that may be of its equivalence if not more attractive in the coming years. Three Motely Fool stock investors have offered their suggestions.
Tim Beyers picked Time Warner as a big earner. Beyers explains that media companies can act similarly to high-tech companies in earning supple returns. He projects that this year Time Warner will continue on track with last year and even perform better than Apple at year’s end. Beyers notes the success of DC Comics that the media giant has acquired more licenses to. They also just recently sold Gotham to Netflix for $1.75 million per individual episode.
Anders Bylund chose Netflix, another media giant, as a stock to watch. Bylunds explains that while Apple has increased their shares 312 percent of the past five years, Netflix has experienced an 81 percent growth and more than doubled Apple’s gain with a 778 percent growth over the last five years. He admits that there have been some speed bumps along the way, but in 2014 the company made corrections that could ensure epic performance in the future.
Dan Caplinger went with Cisco Systems as a competitive stock to watch against Apple. Caplinger says that although Cisco is no longer one of investor’s favorite picks, they are making some big changes and are transitioning into a better position. One key shift is towards the Internet of Things that will help in repositioning the tech-giant into a stronger place. They will focus not only on software but also hardware and still offer clients impeccable networking, communication, and security services.
Apple is giving its competitors a run for their money in reporting its stellar earnings. Apple has some momentum underneath it currently and is said to be heading in the same direction as Google, as both companies continue to mature. As the Apple Watch is released and the year marches on, it will be a matter of great speculation as to how this iconic company continues to perform.