Apple Inc. CEO – Tim Cook – in a recent interview said his company – in comparison to other firms – had an incredible quarter. Also, Cook said when it comes to Apple’s recent financial performance, the investors are missing the big picture.
Apple is much better than others
In an interview with CNBC’s Jim Cramer, Cook said that they had a successful quarter with $10bn in profits, and $50 billion plus in revenues. Cook appeared on CNBC less than a week after the firm reported its first-ever decline in the iPhone sales. Cook came to assuage investors, who have pushed the stock down by more than 10%.
“To put that in perspective, the $10 billion is more than any other company makes. So it was a pretty good quarter but not up to the Street’s expectations clearly,” Cook said. Apple Inc. earned $53bn in profits last year while the number two firm made $24bn, so they are doing pretty well, Cook said. “No one else is earning anywhere near this.”
China – nothing to worry about
Last week, the iPhone maker reported a 26% drop in revenue from Greater China and a 16% decline in iPhone shipments during its fiscal Q2. After the earnings report, Carl Icahn – a billionaire investor – pushed the stock further down by announcing that he had sold his stake in Apple owing to concerns over China. Last week, in an interview, Icahn said the Chinese government could “come in and make it very difficult for Apple to sell there.”
For the first time in 13 years, the iPhone maker reported a fall in the quarterly sales, and even though the investors were not expecting good results, they probably didn’t expect such decline. Hence, the stock did something that it had not done since 1998 – dropping for eight consecutive days.
In response to such concerns, Cook said he had not lost his faith in Apple’s ability to tap consumers in China. Cook said he could not be more positive about China, and if one looks at Apple’s performance on a two-year basis, it can be seen that the firm grew 70% in China. “It’s hard-pressed to say those aren’t good results,” the CEO said.
Further, he discussed the decision by the Chinese government last month to shutter Apple’s iBooks and iTunes’ Movies services. The CEO looked quite confident and optimistic that iBooks and iTunes will be back online as the company is working with relevant businesses and government agencies.
Apple Watch will be a big hit
Talking about innovation, Cook compared the Apple Watch to the iPhone, and said the improvements are in the pipeline for the wearable device. Cook thinks that Apple’s watch will be so necessary to people that in a few years, they will look back and say ‘how could I have ever thought about not wearing this watch’.
After such realization the wearable device will become an overnight success, the CEO said. “We’re still in learning mode. And you will see the Apple Watch getting better and better.”
Cook noted that services such as Apple Music, App Store and Apple Pay play an important role in Apple’s growth. Giving insight into the pace of the expansion of services, Apple Inc. CEO said, they have bought some companies to assist them in services, adding they have acquired a lot of companies though not a large company yet. “We generally acquire a company every three to four weeks, on average. We are always looking,” he said.
At 10.26 am EDT, Apple shares were 0.52% at $94.15. Year to date, the stock is down over 12% while in the last one-year, it is down almost 27%. The stock has a 52-week high of $132.97 and a 52-week low of $92.