Apple Earnings Preview

Today’s the big day for Apple shareholders. Here is a summary of some of the numbers I will be looking at.

Analyst consensus estimates are around $1.23 per share under the new post-split share structure.

Estimates seem to be for around $38 billion for the quarter. Too keep that in perspective, $38 billion is the red line in this chart of Apple’s recent quarterly revenue numbers.AAPL Revenue


iPhone Sales
The consensus for iPhone sales for the quarter is about 36 million. Again, that would be where the red line falls on this chart:



iPad Sales
The iPad consensus seems to be around 14.5 million for the quarter. And here’s the iPad chart with the target line:



Dividend/buyback announcement
Last quarter, Apple announced an 8% dividend hike and a 30% buyback hike. It might be too soon to expect another large boost to either of those numbers only one quarter later, but even small increases in either of those numbers would be a good thing for shareholders.

iWatch/other news
The emergence of the iWatch has been a topic of great debate for years now among Apple enthusiasts. Personally, I am skeptical of the mass appeal of a smart-watch. But any news about this gadget or any other potential new market for Apple would be a major event for shareholders. But product news is not the only surprise news item that could be announced, as news of the recent 7:1 stock split seemed to take everyone by surprise last quarter.

The most important number of all
For Apple shareholders like me, at the end of the day this number is the most important number of all:AAPL

After all, share price is what determines what our stakes are worth. Apple is my largest stock holding, and the stock has done really well lately. Apple is up 24% in the past three months and 54% in the past year.

And believe it or not, that’s not necessarily a good thing when it comes to catalysts such as earnings dates. When stocks have large run-ups in share price prior to earnings, traders sitting on big profits tend to get jittery and feel the urge to book their profits so as to avoid getting burned by potentially bad earnings numbers. These types of traders will feel pressured to sell today before earnings come out. The other type of sellers are traders who are sitting on large profits but want to wait for earnings to come out before they cash out because they don’t want to miss a potential good earnings report. This is the “sell the news” crowd, and they will sell immediately after earnings come out no matter how good or bad the numbers are.

I’m not expecting a lot of excitement surrounding Apple’s earnings this time. I laid out my reasons for buying and holding Apple several months ago, and all of those reasons remain valid. Although if the Wall Street Journal article suggesting that Apple has ordered a whopping 80 million iPhone 6s from suppliers turns out to be a true indicator of what shareholders can expect from the launch of the new iPhone later this year, then there is yet another reason to continue to be excited about Apple’s future.

I plan on revisiting these topics tomorrow after the actual numbers are released, so stay tuned!

I want to take a minute to thank all the people that bought my book this past weekend while it was on sale. I hope you enjoy reading.

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