Apple Beats Wall Street Expectations With Boost From Higher Prices — WSJ

What happened

Apple reported that revenue grew 12% in its September quarter, slightly exceeding Wall Street expectations, while its 47.9% gross profit margin, the share of sales left after direct costs, also edged past analyst estimates. The article says price increases helped the company beat expectations.

Confirmed

Global impact / market context

Higher prices helped Apple meet expectations despite signs that its growth is wavering, but relying on price increases may not be enough to sustain sales growth. The article says the new chief executive faces pressure to maintain momentum as investors expect strong performance.

Analyst inference

The article reports Apple shares trade at 36 times expected earnings for next year, while earnings are expected to grow 1%, slower than its technology peers. That gap helps explain an analyst's concern that the share valuation may be difficult to justify.

Confirmed

What to watch

1. Watch whether Apple can keep raising prices while sustaining revenue growth; the article identifies price increases as a factor that helped the September-quarter result exceed expectations. Analyst inference
2. Watch for evidence of stronger iPhone sales growth and a turnaround in slowing services, which an analyst said would make him more positive about Apple. Confirmed
3. Watch whether the new chief executive maintains momentum, since the article says pressure is on him to meet expectations reflected in Apple's high share valuation. Analyst inference

Evidence

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