Welcome back everyone. Today on the Joseph Carlson Show. This earnings season is coming to a close and some of my companies, in fact some of my biggest holdings, just recently reported earnings, one of them being SP Global, which is up 7% today. After their report, we also can't forget about Apple. This stock was in the green today, but they just barely reported earnings. Apple's also a large holding in My Portfolio and it's one that I've been in for years.
I've been emphatical about this company and the value that it presents to consumers and as an investment, and this has routinely been one of the biggest winners in the portfolio. Apple is a massive company with lots of different numbers and different metrics to track. So in this earnings report I'll be going over what I think are the key metrics, the biggest things that I'm looking for. And we also have some other news to get to.
The Target CEO went on to CNBC and he tried to explain the company's underperformance and why the consumer is slowing down in discretionary spending. He blames the overall economy and consumer preferences, but there's a problem with the Target CEO's excuse. There's a lot of contrary data and I want to highlight why I see problems with his interview.
We also had an Apple event. It was the scary fast Apple event where they talked about their Max and as you would expect, Apple takes you underground to their awesome offices that have incredibly cool lighting. You have all these these really cool sets that they film from.
Well, Apple revealed at the very end of this event, something that I think was the most important thing of the entire event itself, and that was that the event was shot on an iPhone and edited on a Mac. The whole event, this entire thing was shot on an iPhone all along. And this has actually spurred a lot of controversy. And the controversy is the extra equipment they used.
A lot of people are saying that they use so much lighting and they use so many different tools that it makes the iPhone part of it not as impressive. Some people even go as far as saying that this is wrong, that Apple's misrepresenting the iphone's capabilities. So we'll be looking at this controversy and how impressive this really is for Apple. Now, that's not where the Internet drama ends. We also have a debate raging on TikTok.
In this case, it's a list that some user came up with, that these places are not OK to take a girl on the first date. And we have the entire list right here. It includes places like Cheesecake Factory, Applebee's and Chili's. We have a lot of other restaurants and then different activities that are listed up to 28 different events. Now there's a lot of opinions on this. So we'll be settling this debate once and for all. So we have a lot to get to. Let's go ahead and jump right in.
Now, one thing I have to mention first, if you haven't tried out the Patreon membership, today is the day to do it. The Patreon gives you access to qualtrum.com, this website that I built for stock fundamental analysis. You can bring up any company like Google. You can see all of the fundamentals. You can blow up the revenue and see the compound annual growth rate over longer periods of time. You can zoom in to different time periods and see everything
visually. And it does show you an overview of how the company's doing with all of its core fundamentals. Qualtrum also comes with a list of tools. For example, we have an advanced watch list. It shows you the dip Finder. It'll tell you which companies are currently on a dip, which ones are in a price surge.
It has a portfolio analysis tool that will show you a lot of different metrics about your dividend growth, your portfolio by sector and allocation, your win and loss based on your holdings and so on. And it has a beautiful dark mode for those of you that browse your stocks at night. If you join today, you get the entire month for free. That gives you time to try it out, and I think you'll love it. There's a link to it in the PIN comment below.
Now let's go ahead and start off with Apple, which is a very important holding to My Portfolio. The company just reported earnings today and on the day it was up 2% with the rest of the market. And after this earnings report, the immediate reaction is a less than 1% trade down. So it's pretty flattish on the day. We have a minor trade down and this is what I expected, an inline quarter. We have all the major segments of Apple's business highlighted
here. And what I did was I highlighted the parts that beat expectations in green, the parts that came under expectations in red. The earnings per share was a strong beat. The revenue was a beat. The iPhone revenue was a beat. The Mac revenue came in under. The iPad revenue was a beat. Wearables revenue was slightly under. I'd say that's mostly in line to a slight miss. The services revenue, which I continue to believe is the most important part of this company
right now, that was a beat. And then the gross margins was also a strong beat. So this wasn't perfect across the board, but this was pretty good. They beat on the top and bottom line and in most segments of their hardware. Most importantly, again, I
emphasize the service revenue. Everyone has their different ways of analyzing Apple. But the way that I've looked at this company all along is as a consumer, defensive company, an entire circular ecosystem of products that once you start getting in this ecosystem and you get the Apple Watch and the Airpods and the iPads and the Macbooks, once you start getting all of those devices, you start inevitably using the services, the credit card and Apple Pay. I message FaceTime.
You'll probably start paying for iCloud for all of the photos you're taking and on and on and on. Apple sells service after service. When you have all of this hardware on top of all of this software, all integrated firmly together, it forms this very strong ecosystem. That ecosystem is their Moat. It's their competitive advantage.
It's their barriers to entry. The stronger the ecosystem is, the stronger the investment case for Apple is and the more ways they have to monetize users within that ecosystem. We can go down and look at the total revenue of Apple and this is what most investors are looking at. Last quarter was slightly under where it was the quarter a year
ago. We have sales decline now if we breakdown Apple by product category, we can see which part of the company's in decline over the past year and what part's growing. We can, for example, see how Mac sales, specifically Mac sales are doing quarter by quarter. We can see that during 2020, Apple certainly had some pull forward in their Mac sales. Lots of people are getting stimulus checks. Lots of businesses were getting
PPP loans. What do we think they all did with those stimmy checks and with the PPP loans? They bought Macbooks for their employees. They bought them for their work at Home Office. So we're seeing a decline in Mac sales over the past year. That's a little bit expected. If we look at the wearables, this is also grown during 2020, but it's been a bit more resilient. The iPad shows a similar trend. Lots of people started buying them around 2020 and it's mostly
held its own. It's slowing down a little bit over the past quarter. The iPhone, their biggest device has been their most resilient, growing in 2020, also growing in 2021 and holding strong into this quarter. But more important than all is the services of the company. These green bars here represent the highest margin portion of Apple where they make money off of all the subscriptions they sell, all the insurances and all the transactions that happen
through the Apple store. This is the tollbooth of Apple that's well protected and insulated by their ecosystem. We can see the growth of this overtime as well. Back in 2018 the services were just over $10 billion, now they're over 20 billion, so they've doubled over that time period. The services in this most recent quarter grew again to 22.31 billion, so a noticeable growth over the previous year and the past quarter. The rest of Apple's business is slightly cyclical.
The harbor sales come and go but the service revenue is far more secular. This last quarter's earnings per share would put the bar right around there. So a nice improvement over the previous year, mostly due to Apple being all to buy back a lot of their shares. They said on this most recent earnings report that their active install base has again reached an all new high across all geographic segments and they attribute that to their ecosystem and unparalleled customer loyalty.
I think they're being truthful in that people are in the Apple ecosystem and they're not leaving. During the September quarter, our business performance drove double digit earnings per share growth and we returned nearly $25 billion to shareholders while continuing to invest in our long term growth plans. So a $25 billion dividend and buy back in this quarter. I believe there's two main takeaways in this latest Apple report.
The first thing is that the ecosystem is in good standing and that should be music to the Apple shareholders heirs. The ecosystem again is the most important part of the Moat of the barriers to entry. As long as they can maintain their ecosystem and grow that ecosystem, Apple shareholders will reap the rewards and it's getting stronger by the day. They're active install base of devices reached an all new high and all geographies that is a very positive development in
terms of the Apple mode. The second thing is that the most important segment of Apple, the highest margin portion of Apple, the Apple services grew at 16% year over year. So underneath the surface of the gloomy year over year decline in revenue, you have a nice juicy business growing in double digits, in fact, in the high teens. Getting people in the ecosystem and keeping them happy there is the way they'll profit in the future.
As long as Apple can continue to do that, which this report shows they can, they'll continue to give good shareholder returns. Now am I going out of my way to actively buy ale hair hand over fist? No, I'm not right now.
I think it's mostly fair valued. I think the stock has more upside in it, but with the holding that I have already, I'm not in a position where I want to go out and buy a lot more Apple. I was buying the company at $90.00 per share and 1:20, and if we do get a dip in the company, I'll buy more of it. But as of right now I consider Apple a hold. Now another huge company in My Portfolio that recently reported earnings is S&P Global.
This company I've talked about routinely as being a compounder, having a diversified set of businesses within its name, and all of them are high quality businesses. So I have high expectations for this company. They recently reported earnings. They're U-7 on the day because they beat expectations. Now, I'm not going to spend a lot of time on this earnings result because I've gone over and global in detail in numerous episodes, but I just want to
highlight a couple things here. First of all, the earnings per share grew 10% year over year, strong growth in EPS and the revenue increased 8%. We can look at this chart here to get a breakdown of the different segments of the business. The market intelligence grew 8%, ratings grew 20%, Commodity insights 11%, mobility 10%, and the indices portion 6%. Overall, in aggregate and weighted by the business segments, that's 8% growth. You can look at the margins of these businesses.
These are all high margin businesses diving into the report even more. It's as boring as you would expect. The CEO of the company reiterated their previous guidance that they've reiterated before that they've reiterated before. They're very good at making projections and they've held firm to those projections the entire year. So there should be no surprises with S&P Global. They're doing exactly what they said they would do earlier this year. So the two companies that
reported today did really well. And overall I've had a great earning season. I've avoided any type of disaster with my companies. None of them have dropped 10 or 20% like you're seeing with a lot of other lower quality companies. And I attribute this success and earning season to the quality selection of the companies in this portfolio. We can go through just some of the numbers here. S&B Global grew by 8%, MasterCard by 13%, Microsoft grew by 13%.
Apple's revenue was flat, but their net income grew by double digits and the company's services are growing by 16%. Texas Roadhouse grew by 14%, Chipotle by 11%. Now, Costco hasn't given their official report yet, but they released sales results every single month and they're trending up like they always have. VG grew its revenue by over 20% and it's AFFO per share by 11%.
Strong growth out of VG as well. Well, Canadian Pacific is growing fast after the merger and Union Pacific is one of the only companies that's struggling with revenue growth. The railroads have been the slowest part of My Portfolio the entire year, but being flat on them hasn't been too bad. When I look at My Portfolio overall, having this concentrated group of high quality companies has led to really good results this earning season.
And I think if I stick with these type of companies, I'll continue to see the games. Now moving on, we get to an interview of the CEO of Target. He went on to CNBC to explain what he believes are the problems that Target is facing. Now keep in mind, during this time period Target's not having a good year. The company is massively underperforming the broader market. It's down 26% year to date. The financial performance has also looked pretty grim and during difficult times with
companies. What I like to see from the management is leadership, true leadership, which is properly identifying the problems the company's facing, even if the company is at fault. If the company's underperforming because of poor execution or self-made errors, then they should identify that what we see here from the target CEOI believe is something different. Meaning they're they're buying less stuff, they're buying less stuff even within food and
beverage. Again, we look at overall retail spending, just look at the top line. You say, all right, a really healthy consumer and they are spending. But even in food and beverage categories over the last few quarters, the units, the number of items they're buying has been declining. So they're even tightening up their spending in those categories. But in discretionary goods, we've seen 7 consecutive quarters of both dollars and
units declining. So you're buying less apparel, less items for your home, fewer toys. You're seeing some of the pressure in those categories. Now those cycles are going to change. And you've been reporting about categories like toys seeing pretty significant declines. He mentions that for seven consecutive quarters, consumer discretionary spending has been in decline. So consumers are no longer spending on discretionary items at Target.
What I wanted to figure out was how much of this is overall economics and how much of this is specific to Target. We have some conflicting evidence here. For example, the first day of Prime Day this year, the most recent Prime Day just in July was a record for Amazon record spending on Prime Day in 2023. Amazon mentions the top selling deals on their Prime Day, the Fire TV Stick, Lanage, Lip Glowy Bomb Airpods and the Bizzle Carpet Cleaner.
These items sound very discretionary and if you go through the rest of the items, most of these I would categorize as discretionary. So Amazon doesn't seem to be having the same issue with discretionary spending. We also had Netflix gaining 9,000,000 subscribers. Spotify reached an all time high as well and their subscriber base. Consumers seem to be spending on these subscriptions. I could also name off companies like Starbucks. It's up 10% after earnings
today. Is Starbucks discretionary? Do people really need Starbucks? I consider it sort of discretionary, but it seems like they're doing just fine. I believe what we're seeing here is really important. We're having it revealed which companies are really discretionary and which ones aren't, what products customers will give up and which ones they won't. We get to see that clearly illustrated over the next six
months. Now moving on, we have a controversy brewing, a debate over the shot on iPhone of the Apple scary fast event. Now, if you're out of the loop, Apple just recently had an Apple event like they normally do, and it looks like it's professionally shot. In fact, during the event, no one was the wiser. No one had any idea that the entire event was filmed by an iPhone. And the reason why is because it looks professionally produced. It looks indistinguishable from
any other Apple event. Now of course, the big secret here, the reason this looks so good and indistinguishable, is because of all the other stuff that Apple does to help out the production. They have a giant balancing gimbal to make everything look smooth. And of course, they have incredibly expensive and amazing lighting. The combination of set design, the gimbal and the lighting create an amazing production where it looks studio quality, even filmed on an iPhone.
So some people are trying to discredit or at least downplay the effect of the iPhone filming it because it had so much other equipment. In reality, Apple has always used expensive production design and everything they've done. The fact that they were able to swap out a big professional camera with the iPhone and make it so nobody can notice until after the event, that is impressive.
And even the people that are haters trying to downplay it have to believe that that's impressive, that you cannot tell this was filmed by an iPhone. This proves that phone cameras are so good and with proper lighting, with a little bit of set design you can make a professional looking production with a phone camera. Now, finally, we move on to another debate raging right now. It's in the cultural zeitgeist. It's the debate raging on Twitter and on Tiktok.
And it's over. This list that someone came up with somewhere of different events or different places. But you cannot take someone on your first date. And I have the complete list right here. So let's go ahead and go through this list. We have The Cheesecake Factory. Can't take a date there. Applebee's. Chili's. Chipotle. Olive Garden, The movies, Your house. Any fast food chain. So any fast food chain is off limits. Buffalo Wild Wings. Wingstop. Red Lobster. A buffet. IHOP. Denny's.
The gym. Church. Starbucks. Coffee. Dates. Ice cream. Family functions. Movie nights, Somewhere that requires a long drive, bowling, nightclubs, hookah bar, a bar for just drinks, the Waffle House and sport events. That is all 28 places apparently that you can't take a date. Now when I look over this, the answer that's left the obvious place that you can still take a date on the first date is Texas Roadhouse. It wasn't on the list.
Technically it was not on the list, so I'm going to throw in Texas Roadhouse there. Apparently that's OK to take a date on your first date. Now, in all seriousness, when I see this type of list passed around, the idea that a girl would not be willing to go to The Cheesecake Factory on a first date to me is insane. That's crazy.
The one thing that I think that that would serve useful as is if I was going to take a girl on a first date and she refused to go to The Cheesecake Factory because that wasn't up to her standards, that would be very informative. I would have gained a lot of new information. The information that I gained there is that this is not a person I want to be dating. Now some of these I do agree with. Fast food chains are probably not a good idea for a first date.
Your house is also probably not a good idea. Going to church on a first date's a little much. Going to the gym is really weird. Going to family functions could wait until a second or third day at least. So some of these I do agree with. But overall this list is ridiculous and the most ridiculous one I believe is The Cheesecake Factory. I say this is someone who has been married for 10 years strong.
If a girl doesn't want to go on a date to The Cheesecake Factory because it's not up to her standards, I think that's a major red flag I would avoid. That's all for this episode. If you want to see more content, check out the Patreon in the link below.