Andy Zaky editor of Bullish Cross takes a look at how Apple is able to maintain its explosive earnings growth.
To get an idea of how deeply Apple continues to penetrate the market, Apple will likely produce 50% more in sales and 71% more in earnings in 2010 than it did last year. If this growth continues into 2011, Apple will surpass Exxon (XOM) to become the largest corporation in America. Not to mention that it already has more cash than any other company in the United States: $41 billion.
Zaky believes that Apple's success comes from doing an excellent job managing its operational expenses while also increasing its gross margin.
For example, in the first quarter of 2006, Apple reported an overall gross margin of 27.2%. By the second quarter of 2010, Apple's gross margin had climbed to 41.67%. That means Apple is making almost double the amount of profit on each of the products it sold in 2010 than it did in 2006.
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To get an idea of how deeply Apple continues to penetrate the market, Apple will likely produce 50% more in sales and 71% more in earnings in 2010 than it did last year. If this growth continues into 2011, Apple will surpass Exxon (XOM) to become the largest corporation in America. Not to mention that it already has more cash than any other company in the United States: $41 billion.
Zaky believes that Apple's success comes from doing an excellent job managing its operational expenses while also increasing its gross margin.
For example, in the first quarter of 2006, Apple reported an overall gross margin of 27.2%. By the second quarter of 2010, Apple's gross margin had climbed to 41.67%. That means Apple is making almost double the amount of profit on each of the products it sold in 2010 than it did in 2006.
Read More