Apple Beats Hits New Highs

Apple needed a breakout quarter after its last whiff, and boy did it get one. The company reported revenue of $42.4 billion and earnings of $1.42 per share. Analysts were expecting earnings of $1.38 per share on revenue of $42.09 billion. As a result the company added tens of billions of value back to its share price, which rose more than 6% in extended trading. (6% might not feel like a lot, but for a company worth more than $500 billion, it’s a huge amount of value.)

That’s still a down quarter from last year. Apple then reported revenue of $49.6 billion on earnings of $1.85 per share. But that’s to be expected as the company’s core growth engine — the iPhone — has started to reach a saturation point and slow. Apple said it sold 40.4 million iPhones, compared to 51.2 million in the last quarter. But the last year has been largely iterative for the company.

This quarter largely shows an extension of that storyline. Revenue is no longer in growth mode, and iPhone sales are declining. But with industry watchers finally setting expectations that the company isn’t in full-on growth mode any more, it looks like positive news from the company is positive news for investors, who are still looking for new ways to value the company.

Last quarter was a pivotal moment for Apple. The company showed its first revenue decline in 13 years, missing analyst expectations by a mile. iPhone sales, Apple’s main growth driver, were significantly down from the second quarter a year earlier. That sparked a lot of concern that Apple’s core engine may have — actually, most likely — has hit a saturation point.

As a result of that report, Apple’s stock promptly fell off a cliff. $40 billion in value for the company was wiped out in a single afternoon. Google has been nipping at Apple’s heeels, and at some moments seemed likely that it would permanently overtake the position of the most valuable company in the world (as it did at one point, momentarily). Apple’s stock has really yet to recover from that fall in the last quarter, but today was certainly a big help.