What Does Apple Have in Mind for India?

Price movement

Apple (AAPL) has a market cap of $622.8 billion and rose 0.27% to close at $116.95 per share on December 20, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 1.5%, 6.3%, and 13.6%, respectively, on the same day.

AAPL is now trading 4.1% above its 20-day moving average, 3.8% above its 50-day moving average, and 11.6% above its 200-day moving average.

What Does Apple Have in Mind for India?

Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 2.5% of its holdings in Apple. The YTD price movement of SCHB was 12.9% on December 20.

The market caps of Apple’s competitors are as follows:

  • Alphabet (GOOG): $542.3 billion
  • Microsoft (MSFT): $496.3 billion
  • International Business Machines (IBM): $160.6 billion

Latest news on Apple

In a press release on December 20, 2016, Reuters reported the following: “Apple Inc. is in talks with India’s government to explore making products locally, the Wall Street Journal reported on Tuesday, as the US firm aims to make deeper inroads in the world’s second-largest mobile phone market by users.”

The report added: “The Journal said Apple, in a letter to the federal government in November, outlined manufacturing plans and asked for financial incentives.”

Apple’s performance in fiscal 4Q16

Apple (AAPL) reported fiscal 4Q16 (quarter ended September 24, 2016) net sales of $46.9 billion, which represents a YoY (year-over-year) fall of 8.9% from its net sales of $51.5 billion in fiscal 4Q15. The company’s gross profit margin and operating margin narrowed 180 basis points and 310 basis points, respectively.

Its net income and EPS (earnings per share) fell to $9.0 billion and $1.67, respectively, in fiscal 4Q16, as compared to $11.1 billion and $1.96, respectively, in fiscal 4Q15.

Fiscal 2016 results

In fiscal 2016, AAPL reported net sales of $215.6 billion, which represents a YoY fall of 7.7%. Its net income and EPS fell to $45.7 billion and $8.31, respectively, in fiscal 2016, as compared to $53.4 billion and $9.22, respectively, in fiscal 2015.

AAPL’s cash and cash equivalents and inventories fell 2.8% and 8.7%, respectively, between fiscal 2015 and fiscal 2016. Its current ratio and debt-to-equity ratio rose to 1.4x and 1.5x, respectively, in fiscal 2016, as compared to 1.1x and 1.4x, respectively, in fiscal 2015.

Projections

Apple (AAPL) made the following projections for fiscal 1Q17:

  • revenues of $76 billion–$78 billion
  • gross margin of 38.0%–38.5%

In the next part, we’ll look at Procter & Gamble (PG).