Apple loves its profit Pomeranians
Coca-Cola is going hard. It's entering the alcohol biz for the 1st time since 1983, when it sold its rando wine company. Coke is leveraging its trendy Topo Chico sparkling water brand to launch... hard seltzer (details on our pod). Because we definitely needed more of that.
While the S&P 500 and Dow ticked down, the Nasdaq got a little bump in anticipation of Big Tech earnings. Meanwhile, the US economy officially had its worst quarter ever: GDP — the total value of all goods and services produced — took a 33% nosedive for the April to June quarter.
It's surprising, but it's not... Amazon's expenses were up a massive $4B, which should have eaten into profits. But it still managed to double its profit because: almost every single one of Amazon's business lines directly benefited from the corona-conomy. Lockdowns and germ-avoidance hugely favored the Zon's businesses.
Amazon’s earnings just reinforce Congress’ argument... Wednesday, Jeff Bezos tried to convince Congress that Amazon faces real competition — in other words, that it's not a competitor-crushing monopoly. But its massive earnings suggest many Americans view it as a necessary platform, especially mid-pandemic. Many sellers see Amazon as their only option, since it controls ~40% of the US retail ecommerce market and reaches 82% of US households.
What 3 months can buy you... A Lyft — the company, not the ride. Apple took home over $11B in profit last quarter, enough to buy Lyft and still have $2B left over for lunch. Despite having its stores closed and its operations slowed during the pandemic, the trillion-dollar fruit managed to post its best fiscal 3rd quarter (2nd calendar quarter) ever:
Now slice up the Apple... Apple also announced it's going to do a 4-for-1 stock split at the end of August. Investors who own 1 Apple share will suddenly find themselves with 4 (example: if you own 1 share trading at $400, you'd soon have 4 $100 shares).
The bigger the profit puppy, the slower it grows... iPhone is a fully grown St. Bernard. It's undoubtedly Apple's main profit puppy, making up almost half of its sales. But iPhone sales grew less than 2%, even with the introduction of the cheaper $399 SE. Meanwhile, Pomeranian pups grew in the double-digits: iPad sales were up 31% and Mac sales jumped 21%. The WFH shift was like gourmet dog food for those smaller profit puppies' growth spurts.
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