Ed’s Daily Notes for April 24th   Leave a comment

Bloomberg: Apple Sales, Profit Top Estimates as IPhone Still Strong

Big day for Apple:

Apple Inc. took dual steps to reassure investors concerned with its growth prospects, reporting a surge in iPhone sales and giving its shareholder payout program a $30 billion boost.

The world’s most valuable company said fiscal second-quarter profit grew 7 percent to $10.2 billion and sales rose 4.7 percent to $45.6 billion after making the iPhone available through China’s largest wireless carrier, China Mobile Ltd., earlier this year. IPhone sales were 43.7 million, topping analysts’ estimates of 37.7 million, the company said in a statement today.

Apple said it will also increase its repurchase authorization to $90 billion from $60 billion and announced a seven-for-one stock split. In addition, the company boosted its dividend. Apple said it plans to take on debt to pay for the added stock buyback and dividend plans.

Obviously, adding China to their sales was huge for Apple. But you don’t get to add markets like China every quarter. Mind you, they might still be able to leverage China for some growth over the next several quarters.

However, I must admit I like what they are doing with the stock: raising the dividend, the stock split, and the increased share buyback, all amount to taking care of their shareholders. Few companies can do what Apple is doing right now for their shareholders, and that certainly makes Apple worth buying. While I still doubt they will be the same company in 5-10 years that they are now, even I have to admit they are worth holding on the off chance I am wrong.

Bloomberg: Facebook CFO Leaving as Revenue, Profit Exceed Estimates

Facebook Inc. (FB)’s Chief Financial Officer David Ebersman is leaving on a high note, as the company’s first-quarter sales and profit blew past estimates.

The company said today that Ebersman will leave by year-end, to be succeeded by former Zynga Inc. CFO David Wehner. Facebook also announced that revenue rose 72 percent to $2.5 billion, beating the average analyst estimate of $2.36 billion, according to data compiled by Bloomberg.

Facebook’s growth follows a shift to mobile, which now accounts for 59 percent of its advertising revenue, up from almost nothing at the time of the company’s 2012 initial public offering. Facebook is seeking to make even more money on smartphones and tablets by testing a mobile ad network and agreeing to buy text messaging service WhatsApp Inc. for $19 billion, a deal that’s yet to close.

…Facebook has 1.28 billion monthly active users, or almost half the world’s Internet population, up from 1.23 billion last quarter.

That last number is the scary one. The fact that Facebook is still growing at such an amazing rate makes it a borderline “buy”. A lot of growth is already priced into it, but they have monetized mobile better than any other company.

Time: The Drinking Age Is Past Its Prime

Camille Paglia hits another one out of the park with this excellent common sense editorial:

The National Minimum Drinking Age Act, passed by Congress 30 years ago this July, is a gross violation of civil liberties and must be repealed. It is absurd and unjust that young Americans can vote, marry, enter contracts and serve in the military at 18 but cannot buy an alcoholic drink in a bar or restaurant. The age-21 rule sets the U.S. apart from all advanced Western nations and lumps it with small or repressive countries like Sri Lanka, Pakistan, Indonesia, Qatar, Oman and the United Arab Emirates.

Read the whole editorial.


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