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Apple (AAPL) to Report Earnings Today: What's in the Cards?
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Apple Inc. (AAPL - Free Report) is set to report fiscal fourth-quarter results today, after market close. Apple has been a top performer among technology companies so far this year. The company saw its shares jump 54.2% on a year-to-date basis, more than the industry’s rise of 37.6%.
What’s more, the stock touched several all-time highs in October, and recaptured the $1 trillion market cap that it had first achieved last August. Several analysts have also raised their price target for Apple.
So what’s behind Apple’s roaring success? The company’s new iPhones and services have been well received by customers. And it’s expected that the company is on a better growth trajectory in China. Needless to say, these factors will reflect on its fiscal fourth-quarter results.
Firstly, the company’s iPhone XR, XS, and XS Max that were launched at $749, $999, and $1,099 last year, respectively, were quite high-priced. But, the new iPhone line-up has are easier on the pocket.
This is quite encouraging for investors as the price slash is expected to bump up sales. To put things into perspective, the new iPhone 11 retails at $50 less than the iPhone XR.
UBS analyst Timothy Arcur chipped in “investor sentiment on iPhone units has reversed in the recent weeks following the successful launch of iPhone 11 models with a general bias to the upside in 2020.”
Services by the way have always been a valued segment for Apple. CEO Tim Cook had earlier said that he wanted services revenues growth to reach a $51 billion by the end of the fiscal 2021.
And if we look at the fiscal third quarter, on a year-over year-basis, services revenues totaled $43.76 billion, almost close to Apple’s target. The promising trend is expected to have continued in the fourth quarter.
The Apple Card, a credit card launched in partnership with Goldman Sachs (GS - Free Report) as its issuing bank and Mastercard (MA - Free Report) as the global payments network, was launched in August. Growing importance of such a service should positively reflect in the company’s earnings results. Needless to say, growth in Apple’s App store revenues is expected. At the same time, the newest Apple Watch should add another 10 days of sales in today’s earnings report.
Despite foreign currency headwinds, in the fiscal third quarter, Apple announced a “return to growth in Mainland China.” By offering customers trade-in programs, Apple was able to curb the decline in China sales. In fact, the Chinese government’s VAT tax reduction helped Apple return to growth. These factors should yet again help Apple post heartening results this time around.
Timothy Arcur added that “monthly iPhone trends in China are encouraging with data showing growth in two of the last Q3s and comps also get much easier toward year-end.”
Will It Top or Flop?
From the less-expensive iPhone line-up, growing demand for Apple’s services to improvement in China sales, the iPhone maker should certainly come up with promising results for the fiscal fourth quarter.
In fact, Apple currently has an Earnings ESP of +0.13%. This is Zacks’ proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
To top it, the Zacks Consensus Estimate for the company’s current-quarter earnings has trended upward over the past 60 days from $2.83/share to $2.84/share.
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Apple (AAPL) to Report Earnings Today: What's in the Cards?
Apple Inc. (AAPL - Free Report) is set to report fiscal fourth-quarter results today, after market close. Apple has been a top performer among technology companies so far this year. The company saw its shares jump 54.2% on a year-to-date basis, more than the industry’s rise of 37.6%.
What’s more, the stock touched several all-time highs in October, and recaptured the $1 trillion market cap that it had first achieved last August. Several analysts have also raised their price target for Apple.
So what’s behind Apple’s roaring success? The company’s new iPhones and services have been well received by customers. And it’s expected that the company is on a better growth trajectory in China. Needless to say, these factors will reflect on its fiscal fourth-quarter results.
Firstly, the company’s iPhone XR, XS, and XS Max that were launched at $749, $999, and $1,099 last year, respectively, were quite high-priced. But, the new iPhone line-up has are easier on the pocket.
This is quite encouraging for investors as the price slash is expected to bump up sales. To put things into perspective, the new iPhone 11 retails at $50 less than the iPhone XR.
UBS analyst Timothy Arcur chipped in “investor sentiment on iPhone units has reversed in the recent weeks following the successful launch of iPhone 11 models with a general bias to the upside in 2020.”
Services by the way have always been a valued segment for Apple. CEO Tim Cook had earlier said that he wanted services revenues growth to reach a $51 billion by the end of the fiscal 2021.
And if we look at the fiscal third quarter, on a year-over year-basis, services revenues totaled $43.76 billion, almost close to Apple’s target. The promising trend is expected to have continued in the fourth quarter.
The Apple Card, a credit card launched in partnership with Goldman Sachs (GS - Free Report) as its issuing bank and Mastercard (MA - Free Report) as the global payments network, was launched in August. Growing importance of such a service should positively reflect in the company’s earnings results. Needless to say, growth in Apple’s App store revenues is expected. At the same time, the newest Apple Watch should add another 10 days of sales in today’s earnings report.
Despite foreign currency headwinds, in the fiscal third quarter, Apple announced a “return to growth in Mainland China.” By offering customers trade-in programs, Apple was able to curb the decline in China sales. In fact, the Chinese government’s VAT tax reduction helped Apple return to growth. These factors should yet again help Apple post heartening results this time around.
Timothy Arcur added that “monthly iPhone trends in China are encouraging with data showing growth in two of the last Q3s and comps also get much easier toward year-end.”
Will It Top or Flop?
From the less-expensive iPhone line-up, growing demand for Apple’s services to improvement in China sales, the iPhone maker should certainly come up with promising results for the fiscal fourth quarter.
In fact, Apple currently has an Earnings ESP of +0.13%. This is Zacks’ proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
To top it, the Zacks Consensus Estimate for the company’s current-quarter earnings has trended upward over the past 60 days from $2.83/share to $2.84/share.
Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>