Earnings Preview: What To Expect From Apple, Inc. (AAPL) Stock
Earnings season has been rocky for major U.S. tech companies, and Apple, Inc. (Nasdaq: AAPL) investors are likely uneasy heading into the company's third-quarter report on Nov. 2. However, analysts say the newest generation of iPhones have been a big hit, and Apple will likely issue some impressive fiscal first quarter guidance.
Consensus analyst estimates are calling for fiscal fourth-quarter earnings per share of $2.78, up from $2.07 in the same quarter a year ago. Analysts are also expecting revenue of $61.59 billion, up 17.1 percent.
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Analysts are predicting Apple will report 48 million iPhones sold in the quarter, up from 46 million last year.
Wedbush analyst Daniel Ives says Apple's fourth-quarter numbers may not wow Wall Street, but the company's fiscal first quarter guidance will be stronger than expected. Ives is predicting in-line third-quarter iPhone unit sales of 48 million, EPS of $2.78 and revenue of $61.6 billion.
Ives says consensus 2019 iPhone average sales price of about $770 is far too low given early iPhone cycle mix trends, and that 65 to 70 percent of iPhone XR sales will be the higher $899 price point model.
However, Bank of America analyst Wamsi Mohan says China is a cause for concern for Apple. The ongoing trade war has caused significant Chinese currency depreciation relative to the U.S. dollar.
"During the past cycle of a strengthening dollar, China iPhone units declined 20 percent and overall Apple China sales declined 24 percent (year-over-year)," Mohan says.
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While Bank of America has reduced its 2019 iPhone unit sales estimates due to the currency fluctuations, Mohan says he still expects Services revenue growth and aggressive capital return to drive AAPL stock higher in the near-term.
Bank of America has a "buy" rating and $235 price target for Apple. Wedbush has an "outperform" rating and $310 target for AAPL stock.
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