Apple's (AAPL  ) stock was 3% higher following better than expected first quarter results. Revenue was 9% higher and reached $91.8 billion compared to the fourth quarter in 2018. Net income came in at $4.99 per share which was higher than the consensus estimates of $4.55.

Guidance Above Wall Street Consensus

iPhones continue to be the company's biggest revenue source and was $55.96 billion, 8% higher than last year and significantly above estimates of $51.3 billion. The company raised its guidance for the second quarter to $63 billion to $67 billion vs expectations of $62.45 billion. This is a sharp contrast to last year when Apple had to lower revenue guidance due to weakness in China. Guidance for margins was also above Wall Street's expectations at 38 to 39%.

Given the massive gains in the past 12 months and three months, it's fair to expect that the stock could see some months of consolidation. However, some positive developments in the earnings report are that the company doesn't immediately expect any sort of meaningful, impactful supply or demand disruptions despite the coronavirus outbreak.

Although CEO Tim Cook did acknowledge that it created more uncertainty and led to a wider range in guidance than normal. Another looming positive is that the introduction of 5G which many analysts believe could drive another upgrade cycle and lead to a surge in demand for newer, more premium priced phones.

Impressive Long-Term Trends

Apple's earnings continue an impressive run that basically began in 1997 when Steve Jobs returned to become the company's CEO when the consensus was that the company would go bankrupt. A dollar invested in Apple stock following Jobs' return would be worth around $80,000 for anyone with the wisdom to hold onto their shares. In 1997, Apple had $7.1 billion in revenue, while in 2019, it had $268 billion. 2019 has profits of $57 billion. In 1997, Apple lost $1 billion.

Over this time period, the stock has transformed from a high-leverage, turnaround story to a high-growth, high-multiple stock to a value stock to a Buffett-type stock with stable, long-term cash flows and an endurable long-term competitive advantage that attracts yield-seeking investors. Steve Jobs preferred to pile up Apple's cash on its balance sheet. Current CEO Tim Cook has elected to pay dividends and buy back shares. In the past seven years, Apple has bought back $319 billion in stock. These dividends and constant share buybacks have made Apple an institutional favorite in recent years.