Apple’s 3rd quarter results: I find it funny when analysts report a company making $8.8 billion in net income from $35 billion in sales to be a “miss”, but indeed that is what they are reporting today. Sales figures on notebooks, desktops, iPods and iPhones appear to be flattening out. The iPad continues to exhibit significant growth and is probably in the midpoint of its growth trajectory before it finally starts to taper out.
Apple has grown so large that it will become more and more difficult to post high percentage growth figures. Before this release, the market is saying that the entity is worth about $560 billion (noting that at the end of June the company now has $117 billion in cash on its balance sheet). In after-hours trading, the stock is down 5%, so that shaves off about $30 billion off of its capitalization, to about $530 billion.
Extrapolating the last quarter’s results into a full year gives a P/E of 15, or if you subtract the cash stack, a P/E of 12. When you factor in that growth will not quite come as easily for the company, one can get a semblance of how this $530 billion capitalization is not going to become a trillion dollars anytime soon. Still, when you ask yourself if Apple is going to go the way of the dodo like Nokia and Research in Motion, the answer is instinctively no, but nobody thought those other companies would be surpassed so quickly either. Apple has one huge asset in its advantage that its competitors currently do not: it is a fashion icon.