Apple’s Stock Soars As Profits Increase 94%

Michael Convente April 25, 2012 2
Apple’s Stock Soars As Profits Increase 94%

Apple’s stock soared as much as 10% in early market trading as the company released spectacular Q2 2012 earnings results, a significant counter to some analysts who have recently declared Apple’s best days to be behind them.  For the second quarter 2012, Apple posted an eye-popping $11.6 billion in net profit on revenue of $39.2 billion.  The $11.6 billion in net profit is a staggering 94% increase compared to Q2 2011 earnings results.  iPhone sales for the quarter topped 35 million and sales of iPad tablets totaled just under 12 million.  Apple even sold 7.6 million iPods this past quarter, and while the devices are no longer a major growth driver for the company as they were during the early 2000s, these sales figures show there still is a demand for stand-alone MP3 players.

For investors, Apple’s Q2 2012 results are extremely positive, helping Apple’s stock head over the $600 threshold once again.  In the past several weeks, Apple’s stock had dropped more than 10% as some investors questioned whether Apple could continue its dominance in the consumer electronics marketplace, especially with solid competition coming from Samsung’s new Galaxy Note and Nokia’s new Lumia 800 smartphone (review by our friends at here).  With these latest earnings results, Apple quickly silenced all of its critics, as the largest company in the world still managed to almost double profits while adding $10.1 billion to its cash on hand.  Apple now has an estimated $110 billion cash in its coffers.

That amount of cash is truly remarkable.  For example, Apple could purchase Facebook – valued at $100 billionin cash.  And Apple would still have $10 billion in cash remaining, not to mention still having other assets valued at tens of billions of dollars.

Perhaps most remarkable about Apple’s dominance and growth is that the company still has incredible growth opportunities.  China’s burgeoning middle class has increasing amounts of disposable income, and they have shown strong demand for traditionally high-priced Apple products.  Considering that Apple only first introduced the iPhone in China within the past year, even novice investors can see how much opportunity for growth Apple has.


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