For some time now, American companies that sell their wares abroad have been battered by the persistent strength of the dollar.
But Apple (NASDAQ:AAPL) is not your average American company. Its products are so popular and revered, it's managing to post very robust growth numbers despite those currency headwinds. How does Apple do it, and will it continue to perform so well going forward? Sean O'Reilly and Dylan Lewis discuss.
Listen to the entire podcast by clicking here. A full transcript follows the video.
Sean O'Reilly: What did the CFO have to say?
Dylan Lewis: It's interesting to get some color, especially because they're an international company. With all the huge multinationals, something that everyone is facing is really difficult FX. I think one of the most interesting quotes from the conference call, and a testament to what their growth could have been in a different macroeconomic environment was from Luca Maestri, the CFO.
He said "We achieve these outstanding results despite severe, and persisting weakness in foreign exchange rates around the world that have affected all of our geographic segments. This makes our year over year growth rates even more remarkable. In a constant currency, our growth over the fourth quarter would have been 800 basis points higher."
O'Reilly: Oh my gosh!
Lewis: That's insane.
O'Reilly: A company the size of Apple almost needs their own trading floor to deal with all this currency and bonds and stuff. They have $170 billion in treasuries; they almost need their own investment bank, or something.
Lewis: Yeah. They started getting into some of the hedging philosophy a little bit, on the conference call.
O'Reilly: What did they say? I'm curious.
Lewis: Honestly, a lot of that stuff is way over my head. I'll stick to the stocks and talk about it that way. It's something that they provide some color to if you want some reassurance there, but the reality is; this is a macroeconomic factor that's going to impact almost every multinational company.
O'Reilly: This is going to keep going. Yeah.
Lewis: For them to keep posting these kind of results in spite of that is fantastic, I think.
O'Reilly: The stock was up modestly. I think it was up 2% after hours when the earnings first came out and you mentioned that it was up 5% since then.
Lewis: Over the last couple of days, yeah.
O'Reilly: I assume that forward guidance was decent?
Lewis: It was pretty solid. Revenue expected to be somewhere in the neighborhood of $75.5 billion to $77.5 billion. That's compared to fiscal year Q1 2015 of $74.6 billion.
O'Reilly: Gross margins of 39%-40%. Good Lord.
Dylan Lewis has no position in any stocks mentioned. Sean O'Reilly has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.