1 Silver Lining in Apple's Disappointing Quarter

Investors are obviously disappointed with Apple's (NASDAQ: AAPL  ) earnings release. iPhone unit sales missed the mark while revenue guidance also fell short of expectations. However, there is one silver lining that investors can take comfort in: gross margin. Over the past year, gross margin has been a particular cause for concern among investors, but profitability is definitely stabilizing.

Last quarter, Apple put up a 37.9% gross margin, a sequential increase of approximately 90 basis points. Apple already took a hit upfront with deferrals related to free software. After all is said and done, Apple still puts up enviable gross margins for a consumer electronics company. Even if Apple never gets back to its mouthwatering 47% level previously seen, it's hard to complain about 38% gross margins.

In the following video, Evan Niu discusses Apple's gross margins last quarter with Ashraf Eassa.

Is Apple really the best smartphone play?
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further."


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 28, 2014, at 8:04 AM, jdmeck wrote:

    Only exaggerated expectations were missed. The stock is still underpriced.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2812004, ~/Articles/ArticleHandler.aspx, 10/2/2014 2:29:08 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement