Diamonds and Dogs


Apple (AAPL) nearing a trillion dollars. Apple is up 4% following better than expected earnings. Apple easily beat expectations as revenues rose 17.3% year over year to $53.27 billion. Net income came in at $11.5 billion, and operating cash flow of $14.5 billion. Gross margins remain at 38.3%. iPhone shipments of 41.3 mln and iPad shipments of 11.5 mln were in line. Service revenue grew 31% to $9.55 billion and could become a $48 billion business by 2020. Apple Music grew 50% year over year. Americas revenue grew 20% to $24.5 bln; Europe +14% to $12.1 bln; China +19% to $9.55 bln; Japan +7% to $3.9 bln, A-Pac +16% to $3.2 bln.  Apple issued upside sales guidance to $60-62 bln vs. $59.4 bln. During the quarter Apple returned almost $25 billion to investors through their capital return program with $20 billion in share repurchases. Apple currently has 823,000 unique members who own 1.4B active devices. Plenty of upgrades with price targets of $220, $275, $230, $210, and $215.

Blackrock (BLK) has a black eye. The ETF giant is down 5% to a 9 month low as Fidelity Investments outlined plans on Wednesday to launch no-fee index funds. The move marked the latest round of price cutting in the asset management industry, which has benefited from rising markets and steady inflows of investor cash to passively managed products. Closely-held Fidelity of Boston said the Zero Total Market Index Fund and the Zero International Index Fund will be available to investors on Friday.

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