Just before summer ended, Apple’s (NASDAQ:AAPL) well-timed stock split alongside Tesla (NASDAQ:TSLA) sent shares to new highs. In October, the stock tried to re-take the $137.98 52-week high only to fail.
Apple’s quarterly earnings report, which did not benefit from the iPhone 12 launch, sent the stock down 5.6% on Oct. 30. Investors who missed the exit will have to wait until the holiday season, Apple services, and iPhones 12 sales lifting profits higher.
Weak iPhone Sales
Apple posted FQ4 revenue growing a modest 1% year-on-year to $64.69 billion. It earned 73 cents a share. iPhone sales missed consensus estimates of $27.73 billion but not by much, at $26.4 billion. Mac sales reached a record high of $9.03 billion. Still, investors should not have expected XR and iPhone 11 sales growth. Consumers waited for the refreshed 5G-enabled device. And although the pandemic would normally slow sales of expensive devices, Apple faced no such headwinds.
As Apple is bundling Music and TV (for example) in an Apple One subscription, investors should expect profitability rising steadily in 2021. The 5G refresh will also drive subscription growth. Finally, excluding the earphone and power adapter will add at least $5 – $10 in extra profits per unit sold.
Hold Apple shares.