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Apple Q4 Earnings Beat, Outlook Upsets: ETFs in Focus
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Apple Inc. (AAPL - Free Report) reported solid fourth-quarter fiscal 2023 results, wherein it beat estimates on both earnings and revenues. The company’s iPhone sales hit a new record in the fiscal fourth quarter. However, it is overshadowed by a cautious outlook for the holiday quarter.
Apple shares dropped as much as 3% in after-market hours on elevated volume following the cautious outlook. This has put ETFs having the largest allocation to the tech titan in focus. Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) , iShares US Technology ETF (IYW - Free Report) and Vanguard Mega Cap Growth ETF (MGK - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Apple Earnings in Focus
Earnings per share came in at $1.46, beating the Zacks Consensus Estimate of $1.39 and improving 13% year over year. Revenues fell 1% year over year to $89.5 billion but edged past the estimated $89 billion. This marks the fourth consecutive quarter of revenue decline and the company’s longest revenue decline in more than two decades (see: all the Technology ETFs here).
iPhone sales grew 3% to a $43.8 billion, marking a September-quarter record. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, soared 16% year over year to an all-time high of $22.3 billion. Revenues from Wearables, Home and Accessories, which include Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, declined 3% to $9.3 billion. Mac sales fell 34% to $7.6 billion, while iPad sales declined 10% to $6.4 billion.
The tech giant offered a cautious outlook for the holiday quarter. Apple CFO Luca Maestri indicated that revenues in the upcoming quarter are expected to be "similar" to last year, with revenues for Mac, iPad, and Wearables categories expected to "decelerate significantly" from the fourth quarter.
Apple has the strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and the first carbon-neutral Apple Watch models, a major milestone in the efforts to make all Apple products carbon neutral by 2030.
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.2% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, and semiconductors & semiconductor equipment (read: Can Q4 Earnings Give a New Lease of Life to Apple ETFs?).
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $57.3 billion and an average daily volume of 6.5 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF manages about $48.5 billion in its asset base and provides exposure to 319 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 21.2% share. Systems software, technology hardware storage & peripheral, semiconductors and application software are the top four sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 489,000 shares.
MSCI Information Technology Index ETF is home to 316 technology stocks with AUM of $6.8 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.3% share in the basket.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 204,000 shares a day.
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 134 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 18.1% of the assets.
iShares Dow Jones US Technology ETF has AUM of $11.5 billion and charges 40 bps in fees and expenses. Volume is good as it exchanges 667,000 shares a day.
Vanguard Mega Cap Growth ETF offers diversified exposure to the largest growth stocks in the U.S. market. It tracks the CRSP US Mega Cap Growth Index and holds 88 securities in its basket, with Apple accounting for 14.9% of the total assets (read: Growth ETFs to Shine as Fed Hints at End of Rate Hike Era).
Vanguard Mega Cap Growth ETF charges 7 bps in annual fees and trades in a good volume of around 306,000 shares a day on average. The fund has AUM of $13.7 billion.
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Apple Q4 Earnings Beat, Outlook Upsets: ETFs in Focus
Apple Inc. (AAPL - Free Report) reported solid fourth-quarter fiscal 2023 results, wherein it beat estimates on both earnings and revenues. The company’s iPhone sales hit a new record in the fiscal fourth quarter. However, it is overshadowed by a cautious outlook for the holiday quarter.
Apple shares dropped as much as 3% in after-market hours on elevated volume following the cautious outlook. This has put ETFs having the largest allocation to the tech titan in focus. Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) , iShares US Technology ETF (IYW - Free Report) and Vanguard Mega Cap Growth ETF (MGK - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Apple Earnings in Focus
Earnings per share came in at $1.46, beating the Zacks Consensus Estimate of $1.39 and improving 13% year over year. Revenues fell 1% year over year to $89.5 billion but edged past the estimated $89 billion. This marks the fourth consecutive quarter of revenue decline and the company’s longest revenue decline in more than two decades (see: all the Technology ETFs here).
iPhone sales grew 3% to a $43.8 billion, marking a September-quarter record. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, soared 16% year over year to an all-time high of $22.3 billion. Revenues from Wearables, Home and Accessories, which include Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, declined 3% to $9.3 billion. Mac sales fell 34% to $7.6 billion, while iPad sales declined 10% to $6.4 billion.
The tech giant offered a cautious outlook for the holiday quarter. Apple CFO Luca Maestri indicated that revenues in the upcoming quarter are expected to be "similar" to last year, with revenues for Mac, iPad, and Wearables categories expected to "decelerate significantly" from the fourth quarter.
Apple has the strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and the first carbon-neutral Apple Watch models, a major milestone in the efforts to make all Apple products carbon neutral by 2030.
ETFs in Focus
Technology Select Sector SPDR Fund (XLK - Free Report)
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.2% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, and semiconductors & semiconductor equipment (read: Can Q4 Earnings Give a New Lease of Life to Apple ETFs?).
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $57.3 billion and an average daily volume of 6.5 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF (VGT - Free Report)
Vanguard Information Technology ETF manages about $48.5 billion in its asset base and provides exposure to 319 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 21.2% share. Systems software, technology hardware storage & peripheral, semiconductors and application software are the top four sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 489,000 shares.
MSCI Information Technology Index ETF (FTEC - Free Report)
MSCI Information Technology Index ETF is home to 316 technology stocks with AUM of $6.8 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.3% share in the basket.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 204,000 shares a day.
iShares US Technology ETF (IYW - Free Report)
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 134 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 18.1% of the assets.
iShares Dow Jones US Technology ETF has AUM of $11.5 billion and charges 40 bps in fees and expenses. Volume is good as it exchanges 667,000 shares a day.
Vanguard Mega Cap Growth ETF (MGK - Free Report)
Vanguard Mega Cap Growth ETF offers diversified exposure to the largest growth stocks in the U.S. market. It tracks the CRSP US Mega Cap Growth Index and holds 88 securities in its basket, with Apple accounting for 14.9% of the total assets (read: Growth ETFs to Shine as Fed Hints at End of Rate Hike Era).
Vanguard Mega Cap Growth ETF charges 7 bps in annual fees and trades in a good volume of around 306,000 shares a day on average. The fund has AUM of $13.7 billion.