Apple shares set a new all-time high in trading late last week after Berkshire Hathaway, led by Warren Buffett, bought more shares of the iPhone maker.
Reuters, citing a Berkshire Hathaway disclosure, reported the company purchased an additional 75 million shares of Apple during the first quarter of 2018. That was enough to drive shares of Apple up more than 4 percent, pushing its market cap to more than $900 billion as of the close of trading Friday (May 4). “If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States,” Buffett told CNBC, according to Reuters. Berkshire’s investment in Apple stands at 240.3 million shares with a value of $42.5 billion, noted Reuters. Berkshire may be aggressively purchasing Apple shares because it has a huge cash position of $116 billion and hasn’t made any major acquisitions for more than two years. In the company’s annual letter, Buffett said he wanted to buy one or more large non-insurance companies to lower its cash pile, and acquiring Apple stock accomplishes that — although Berkshire isn’t buying the entire company.
For the March quarter, Apple reported revenue that increased 16 percent year over year to $61.1 billion in the fiscal second quarter — its fastest growth in two years and ahead of analyst estimates of $60.9 billion. Forecasts for next quarter’s revenue fell in the range of $51.5 billion to $53.5 billion, also ahead of Wall Street.
Apple sold 52.2 million iPhones in the fiscal second quarter, up a slim 2.9 percent from a year earlier and slightly below the 52.3 million that analysts had been looking for on average. That said, iPhone sales were well ahead of many of the diminished predictions of the last few weeks as data from supplier component sales made the rounds among investors. Price per phone also came in a bit below the average investor consensus of $740, at $728 per phone. Away from the core iPhone business, Apple reported record services revenue of $9.2 billion, a 31 percent growth rate year on year and a handy beat on analysts’ $8.3 billion forecast. Apple CEO Tim Cook noted that all of the services’ component parts — the App Store, Apple Music, iCloud storage and Apple Pay — posted record results in sales and growth of at least 25 percent year on year (though they did not break out any more specific numbers). Apple estimates its services will be a $50 billion annual business by 2021.