Apple Inc. (AAPL): What Is the True Significance of This Federal Court Case?

Amazon.com, Inc. (NASDAQ:AMZN)’s top line growth is predicted to sustain in the 20%-25% range annually through 2015, with revenue increasing from 2012’s $61.09 billion to $108.53 billion by 2015. The bottom line for the company is expected to grow in the 60%-65% range annually through 2015, with net income rising from 2011’s $613 million to 2015’s anticipated $4.21 billion. The company presently holds a negative price-to-earnings ratio, and does not pay out a dividend. Overall, Amazon earns 3 out of 5 stars, and possesses tremendous fundamental growth but carries a premium valuation.

As a result of the recent split in News Corp into 21^st Century Fox and the new News Corp, there is a substantial lack of financial information available on a company-specific basis so a deep fundamental analysis of News Corp isn’t possible. News Corp’s primary holdings consist of 130 newspapers, sports programming in Australia, and book publishing services including HarperCollins. News Corp presently carries a market value of $8.66 billion.

CBS Corporation (NYSE:CBS)’s top line growth is predicted to sustain in the 3%-4% range annually through 2015, with revenue increasing from 2012’s $14.08 billion to $15.57 billion by 2015. The bottom line for the company is expected to grow in the 10%-11% range annually through 2015, with net income rising from 2012’s $1.57 billion to 2015’s anticipated $2.13 billion. The company presently holds a price-to-earnings ratio of 19.78, and pays out a dividend yielding 0.91%. Overall, CBS Corporation (NYSE:CBS) earns 4 out of 5 stars, and is a solid investment possessing steady growth metrics and a reasonable valuation.

The Foolish bottom line

The ruling in this case is a substantial victory for the federal government, but the loss is not monumental for Apple Inc. (NASDAQ:AAPL). If the company’s appeal does not rid it of this annoyance, the fine that it will be forced to pay will not financially ruin the company. Meanwhile, Apple’s e-book segment will continue to grow well into the future.

Amazon is the real winner in this scenario, with the company being able to further accelerate the sale of its Kindle devices through discounted e-books. For the publishers, they will be forced back into an environment where sellers will be allowed to discount their products, an environment which they fought so hard to destroy.

The article What Is the True Significance of This Federal Court Case? originally appeared on Fool.com and is written by Ryan Guenette.

Ryan Guenette owns shares of Apple. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and Apple. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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