NEW YORK (TheStreet) -- Shares of Apple (AAPL) - Get Report have surged about 7% since the iPhone maker reported second-quarter earnings on Tuesday, even though the company sold about 7.1 million fewer iPhones than a year ago.
Devices such as the Apple Watch are failing to counteract the drop in iPhone sales, and Apple's efforts to diversify further into TV haven't been welcomed by media giants such as Disney (DIS), 21st Century Fox (FOXA) and CBS (CBS), the Wall Street Journal reports.
At issue has been Apple's desire to freeze for several years the monthly rate per viewer it would pay the media companies to license their channels, according to the Journal. The media organizations typically receive annual rate increases, which help fuel earnings growth.
The tough negotiating style that benefited Apple in music has fallen flat with TV.
Apple's TV business currently makes up a small portion of its revenue, generating more than $1 billion in annual sales vs. $233.72 billion total sales in its most recent fiscal year.
But CEO Tim Cook said on Tuesday's conference call that Apple's TV efforts are in their infancy. The company is now revamping the Apple TV to facilitate app development and is boosting its original programming, the Journal adds.
The stock is up 0.05% to $104.39 in pre-market trading.
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Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Apple's strengths such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: AAPL
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.