With Apple Inc. (NASDAQ:AAPL) set to report its first-quarter 2017 earnings after the bell today (Tuesday 31), we wanted to provide you with analysis courtesy of Investing.com Senior Analyst, Clement Thibault:
Today’s earnings could signal trouble ahead….
“With the stock trading at around $121, we believe AAPL is fully priced.
“While iPhone sales slow, the company’s Services group—namely App Store revenue, AAPL’s insurance program for Apple devices, Apple pay, and accessory licensing—continue to provide a nice boost to Apple’s numbers.”
“Apple is estimated to own about 43.5% of the mobile market share in the U.S. which would mean there are more than enough customers the company could appeal to via ecosystem related services.”
“AAPL’s rich, 39% profit margin is made possible, in part, because of low labor costs, since it manufactures in China. Should AAPL be forced to relocate manufacturing operations to the U.S., or pay a border tax on its products, Apple’s profits will certainly tumble. Additionally, last year AAPL sponsored 1,500 H1B visas; any changes to that program, which Trump roundly excoriated during his campaign, will likely impact its ability to recruit talent abroad.”
“Once AAPL’s most promising geographical growth opportunity, the Chinese market has actually transitioned into its biggest geographical sales deficit, with -17% loss in fiscal 2016.”
“Over the past two weeks, Timothy Cook, AAPL’s CEO, sold 90 thousand shares of the company for approximately $11-million dollars. Portfolio rebalancing or profit taking? It’s not clear.”