Apple’s new record

Hey Superheroes,

We saw some big swings in the market this week ahead of and after the U.S. Fed’s interest rate decision. 

It must feel pretty awesome to be Fed Chair… Jerome Powell’s words of “it’s unlikely that the next policy rate move will be a hike” made global headlines and shifted the skittish markets back into the green. 

Both ASX and Wall Street earnings season continue with some of Australia’s Big 4 Banks and Wall Street’s Magnificent Seven reporting. Here are this week’s stories.

Apple to buy back US$110 billion worth of shares

Announcing a first-ever dividend, like Google did last week, isn’t the only way to make headlines. 

Apple proved that after unveiling a new record share buyback of US$110 billion. That’s worth over 4% of the total market cap of the second largest company in the world, based on last night’s closing price. 

And like icing on top, Apple also announced a 4% increase to its cash dividend.

📊 Mixed segment performance

Looking into Apple’s quarterly performance showed mixed results when compared to analyst expectations:

• Revenue: $90.01b expected vs $90.75b actual (↑0.8%)
• Earnings per share: $1.50 vs $1.53 (↑2.0%)
• iPhone revenue: $46b vs $45.96b (↓0.01%)
• Mac revenue: $6.86b vs $7.5b (↑9.3%)
• iPad revenue: $5.91b vs $5.6b (↓5.2%)
• Services revenue: $23.27b vs $23.9b (↑2.7%)

Net income last quarter was overall 2% lower than the same quarter last year. However Apple defended this by saying that last year’s numbers were padded up by delayed iPhone deliveries from COVID-19 supply issues.

Among all its product lines, only Apple’s Macs did better than expected. The revenues for the iPhone, iPad, AirPod and Apple Watch lines were all below expectations and were also down year-on-year. 

🔎 Mark your calendars

Despite that, Apple shares surged 6% in after-hours trading following the report. 

Perhaps the market is buzzing thanks to the record-breaking share buyback and dividend boost or it could also be about Apple’s exciting 7th of May online event.

Apple is apparently set to release new iPad models then – the first since 2022 – while also announcing its “big plans” on AI.

Either way, we’ll probably talk about it in next week’s Spotlight!

Former ASX 200 company AVZ Minerals is delisting

AVZ Minerals (ASX:AVZ), a lithium developer with a market cap of A$2.8 billion, is set to be delisted from the ASX on the 13th of May. 

The former ASX darling had been on a trading suspension since May 2022 due to an ongoing title dispute regarding its Manolo Project in the Congos.

🔎 A little background

A veeeery long story short, AVZ Minerals went into trading suspension two years ago because it had been battling against several entities – including the Democratic Republic of Congo (DRC) and a few mining companies in Africa and China – for ownership stake on the land where the Manolo Project exists. 

AVZ Minerals had believed it owned a 75% stake, but estimates see it falling to just 36% if it is deemed that the ownership claims by the other entities hold true.

This came as a shock to investors at the time, given that AVZ Minerals announced that it had received the licence needed to start mining just a few days before the news.

One of the latest updates on the dispute was in January this year. The International Center for Settlement of Investment Disputes (ICSID) made orders to the DRC to temporarily reinstate the title of the land in favour AVZ Minerals, until a final decision on the case is made. 

🕵️‍♂️ What delisting means

Unfortunately for AVZ’s shareholders, the ASX delists companies that have been on trading suspension for two years. AVZ Minerals announced that it doesn’t intend to fight the delisting.

Delisting does not mean that shares are lost or sold, it just means that shareholders of AVZ Minerals will no longer be able to buy and sell their shares on the ASX. 

🔦  Some other things we’re shining the Spotlight on:

• AMAZON’S EARNINGS BEAT: Amazon beat first quarter analyst expectations as net sales grew 13% year-on-year. Amazon Web Services (AWS) and its advertising segment were strong growth drivers. AWS, especially, is expected to generate US$100B in revenue this year.
• CASH APP RAKES IT IN: Block, parent company of home-grown Afterpay, jumped over 10% today after reporting quarterly net income that is quadruple that of last year’s.  Cash App was a significant contributor, growing gross profit 25% year-on-year.
• MACQUARIE’S LACKLUSTRE YEAR: Macquarie Group reported a 32% fall in net income for FY 2024, its sharpest decline in 15 years, citing falling commodity prices. The investment bank cut its dividend to A$3.85 a share, down from $4.50 this time last year.

That’s all for this week’s Spotlight! 

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