When you consider Apple makes $560 in profit per iPhone 7 sold, it’s hard to imagine the stock selling off on their reported results. This week Apple reported 3 rd Quarter revenues of a whopping $44.5 billion. But investors were expecting an extra $1.2billion… so they sold the stock nearly 2% lower. Here are a few other things their result revealed…

The Apple Cult

Apple has been compared to a cult, with Apple aficionados camping outside stores around the world, just so they can be the first in line to get their latest product release. Because of this, Apple can earn strong gross margins of around 38% on a healthy sales base (50.8 million iPhones sold last quarter), which generates plenty of profit, and building cash reserves. UBS estimate Apple has $109.8 billion of unrepatriated profits, and cash reserves of around $340 billion. The Trump Administration has its eyes on those profits, and investors are watching the cash reserves. To put the cash reserves in context, Apple could easily buy our three biggest banks; Commonwealth Bank, Westpac, and National Australia Bank in one go. This time around though, Apple boosted their capital return program by upping share buybacks by $35 billion, and lifting the quarterly dividend to 63cps.

Apple gets Ethical

Apple also released an Environmentally Responsibility Report, and in the 2017 edition, they’ve stated their intention to manufacture all products from 100% renewable or recycled materials. Part of this would include establishing a “closed-loop supply chain” for the key ingredients of aluminium, copper, tin and tungsten.

“One day, we’d like to be able to build new products with just recycled materials, including your old products.” Apple.

Lithium-ion batteries in iPhones contain more cobalt than lithium, and the greatest producer of the world’s cobalt is the Democratic Republic of Congo.

Much has been said as to how some of these minerals are mined, and in the DRC there are significant instances of child labour used in extremely unsafe conditions.

In 2016 Apple developed a specialised recycling robot they named Liam. Liam’s job is to extract recyclable materials from iPhones. So pretty soon, you’ll be asked to hand back your old iPhone, so Liam can perform his duties… and at the same time help bring an end to child labour (and increase iPhone sales!).