Here’s What Investors Should Expect On The Upcoming Earnings Release Of The IPhone Maker.
Apple Inc (NASDAQ:AAPL). is scheduled to deliver its first quarter earnings report after the closing bell on Tuesday. The AAPL stock tends to move sharply after earnings, thus plenty of investors will be watching the company earnings results closely.
Earnings Preview
Analysts’ expectations reveal that the consumer electronics giant is set to announce earnings per share (EPS) at $3.22 on $77.03 billion in revenue. Most analysts are projecting an in-line December quarter with a likely miss on guidance for the coming March quarter. Should the tech titan guide for a disappointing second-quarter, downward estimate revisions are to be expected.
Analysts are estimating a gross margin of roughly 38.5% in the first-quarter and adjusted earnings of around $1.90 to $2 per share for the second-quarter.
What investors should look for is the sales of the iPhone 7 following holiday sales in the quarter to see if it can pull out Apple from its sluggish earnings for the past few quarters. Revenue from its flagship iPhone is forecasted to gain about 3%, to $53.1 billion from $51.6 billion in the same period last year, on a slight growth in units sold.
RBC Capital Markets analyst Amit Daryanani stated that Wall Street is expecting an estimate of 74 million to 76 million iPhone units, although the consensus pegs higher at roughly 77 million. For the March quarter, the analyst projects about 50 million to 52 million units.
It’s broadly assumed that the iPhone 7 Plus is selling well, even better than the smaller version of it. Most of Wall Street analysts are forecasting a strong average selling price in this aspect due to a great mix of the device. JPMorgan analyst Rod Hall said the mix could be as high as 45% to 50% while he was previously forecasting that only 40% of the sold iPhones were on the bigger Plus variety. However, he and Daryanani cautioned that currency headwind could partially counter the greater mix of Plus iPhones, and stand to pressure the average selling price.
AAPL Analysis
AAPL shares had inched downward by as much as 0.60% to $121.22 during regular trading hours on Monday, and closed the session with a 0.26% loss to $121.56.
Looking at the chart, the stock has been fairly strong the past few months with prices hitting levels it hasn’t been since late 2015. In its last earnings release on October 25, 2016, however, the stock fell from $118.30 to $115.41 in volatile trading. Fourth quarter earnings resulted a decline in revenue, net income and gross margin compared with the year-ago period. Although, Apple had reported an all-time high for its Services business which gained 24% and a new record of $16.1 billion in operating cash flow for the September quarter.
It eventually hit $104.12 on November 14, 2016, a level last seen on September 2016. Since then, the AAPL stock has been steadily rising to reach a level not seen since November 2015.
Watch out for shares to be more volatile following their earnings report after today’s close, especially that the current candle resides in a breakout.