Apple Inc. recently reported 1Q 2023 financial results with a revenue of US$117.2 billion, a 5.5% decrease from 1Q 2022. The company's net income was US$30.0 billion, down 13% from the same quarter the previous year, resulting in a 26% profit margin, compared to 28% in 1Q 2022. The decrease in margin was due to the drop in revenue. Earnings per share for 1Q 2023 were US$1.89, compared to US$2.11 in 1Q 2022.
Despite the lower financial results, Apple's stock price rose 2%, possibly due to market makers looking to liquidate a lot of short positions. However, some are concerned that if the iPhone 15 does not bring significant innovations, Apple may face a similar fate as Nokia.
It is uncommon for stock prices to be uncorrelated with financial results, so the notion that this could mark the bottom for the equity markets is surprising. Financial literature does not typically state that lower earnings result in an increase in stock price.
What do you think?
Despite the lower financial results, Apple's stock price rose 2%, possibly due to market makers looking to liquidate a lot of short positions. However, some are concerned that if the iPhone 15 does not bring significant innovations, Apple may face a similar fate as Nokia.
It is uncommon for stock prices to be uncorrelated with financial results, so the notion that this could mark the bottom for the equity markets is surprising. Financial literature does not typically state that lower earnings result in an increase in stock price.
What do you think?