Apple (NASDAQ:AAPL) reported $37.4 billion in revenues in Q3 compared to the estimates of $37.98 billion. The company issued Q4 guidance which had revenues being between $37 billion and $40 billion, gross margins being between 37% and 38%, and operating expenses being between $4.75 billion and 4.85 billion. The $7.7 billion in net profits increased from $6.9 billion in last year's Q3. The gross margins were 39.4% this quarter compared to 36.9% in Q3 2013. International sales were 59% of the company's total revenues. The company has acted on $74 billion of its $130 billion capital return program, which has 6 months remaining.
I have written many articles on Apple. The one I would like to focus on is "Apple Dithers While Google Reinvents The Smartwatch". This article focuses on the most important profit growth driver that Apple likely has: the smartwatch. In the article I was bullish on the overall company because of the iPhone 6 product launch and the company's capital return program, but I was skeptical of the release of the smartwatch because of competition.
After trying on the two smartwatches that have been released so far [LG G Watch and Samsung (OTC:SSNLF) Gear Live], I have softened my negative stance on the Apple iWatch. The watches were uncomfortable and aren't very useful considering the fact that a smartphone is just as portable and way more functional. Even if the Moto 360 is spectacular, as I expected in my article, this doesn't make the competition so tough that Apple can't compete with it. Apple will likely revolutionize the smartwatch industry as it is partnering Swatch (OTCPK:SWGAF) to get the design right. While I was already bullish on Apple, this change of opinion makes me even more bullish on the name.
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