Apple reported financial results for the first quarter of fiscal year 2017 that ended December 31, 2016. The company posted all-time record quarterly revenue of $78.4 billion resulting in all-time record quarterly earnings per share of $3.36.

Tim Cook, Apple’s CEO, reported that the holiday quarter represented records in iPhone sales, Mac sales and Apple Watch sales. Revenue from Services grew strongly led by record customer activity on the App Store.

The reported quarterly earnings easily beat analysts’ expectations. However, future guidance was subdued, leading to concerns by investment analysts on future growth. Apple is already the world’s largest company by market value, having a massive cash pile of around $250 billion and generating over $27 billion of operating cash flow in the last quarter.

Apple’s guidance seem to estimate a constant growth trend going forward. Market analyst on the other hand want to be surprised with above trend growth. Constant growth is already being priced-in by the market.

In other words, pumping out a new iPhone each year may not be enough to justify an increase in valuation by analysts especially if main competitor Samsung hits back in 2017. Tim Cook seemed to understand the market’s mood when he said that he is very excited about the products in the pipeline.

On a separate, but probably equally important note, Apple Inc. is considering taking legal action against the executive order by U.S. President Donald Trump that halted entry by persons from some predominantly Muslim countries.

Apple joins other Silicon Valley firms including Alphabet Inc. in protesting the order, which threatens to cut the flow of immigrant talent to the industry. Tim Cook was quoted saying, “More than any country in the world, this country is strong because of our immigrant background and our capacity and ability as people to welcome people from all kinds of backgrounds.”

Trump’s order prevents people from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen from entering the U.S., a move the White House says is needed to safeguard the country from terrorist acts. However, at least half of the top 20 U.S. tech companies were founded or are currently led by someone who came from another country. Apple co-founder Steve Jobs was himself the son of a Syrian immigrant, while the CEO’s of Microsoft Corp. and Google were born in India.

The industry also relies on foreigners to make up for the dearth of homegrown engineering talent needed to write advanced software and build complex machines. May of the core tasks at Silicon Valley companies are handled by immigrants according to Bloomberg.

This article was issued by Antoine Briffa, Investment Manager at Calamatta Cuschieri. For more information visit, The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.  


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