Discussion on recent earnings reports, analysis of Apple's earnings report and the importance of their ecosystem, exploring the revenue decline and hidden growth in Apple's business, analysis of various companies' strong financial performance, decline in consumer discretionary spending, success of Amazon's prime day, growth of subscribers for companies like Netflix and Spotify, and quality of shot on iPhone footage from an Apple event.
Apple's ecosystem and the growth of its services segment provide a positive outlook for the company's future.
S&P Global's consistent performance and strong leadership have resulted in positive results in this earning season.
Deep dives
Apple's Earnings Report: Strong Performances and Growing Services Revenue
Apple recently reported its earnings, with strong performances in earnings per share, revenue, and iPhone revenue. While Mac revenue and wearables revenue were slightly below expectations, the services revenue, seen as the most important segment for Apple, showed growth. The company's ecosystem, which includes a range of products like Apple Watch, AirPods, and iPads, drives customer loyalty and offers multiple revenue opportunities. Despite a flat total revenue compared to the previous year, the services segment has continued to grow, doubling since 2018. The ecosystem's strength and the growth of services provide a positive outlook for Apple's future.
S&P Global's Earnings: Compounder with Diversified High-Quality Businesses
S&P Global reported earnings that beat expectations, causing a 7% increase in the stock's value. The company, known for its diversified high-quality businesses, showcased growth in earnings per share and revenue. Market intelligence, ratings, commodity insights, mobility, and indices segments all contributed to an overall 8% growth. S&P Global has maintained its guidance throughout the year, demonstrating strong leadership. The company's consistent performance, along with other high-quality companies like Mastercard, Microsoft, and Costco in the portfolio, has provided positive results in this earning season.
Target's Underperformance and the Debate on Consumer Spending
Target's CEO went on CNBC to explain the underperformance of the company, attributing it to declining consumer discretionary spending. However, contrasting evidence from other companies like Amazon, Starbucks, Netflix, and Spotify reveals that discretionary spending is still happening in certain categories. The debate sheds light on which products consumers are willing to give up and which ones they prioritize. Target's year-to-date decline in stock price showcases the challenges the company faces, but the management's ability to recognize the underlying problems is crucial for future improvement.