Will Apple surprise when it reports earnings?

Posted Oct 20th 2008 5:30PM by Melly Alazraki
Filed under: Earnings Reports, Apple Inc (AAPL)

What are Apple Inc. (NASDAQ: AAPL) numbers going to be like when it reports its fourth quarter results Tuesday after the close? That's the question many are asking as profit takers vie with bargain hunters in a roller coaster market.

Analysts on average expect Apple to post a profit of $1.11 a share, up from $1.01 in the year-ago quarter, on a 30% revenue growth to $8.05 billion. For the current quarter, analysts expect earnings to decline to $1.66 a share from $1.76 a year earlier, with sales increasing 10% to $10.6 billion.

Usually, though, the Street expects Apple to beat expectations by a nice margin, so could Apple deliver tomorrow? Well, according to NPD, a market research company, Mac unit sales in September were up 19% year-over-year. From NPD's data, Apple may have shipped between 2.7 million and 2.8 million Macs during the quarter and sold 11 million iPods -- a 7% increase. Both numbers are ahead of what is anticipated. Add to the mix the iPhone 3G released in July, as well as other more recent product launches, and Apple most likely will beat expectations.

But will it be enough to satisfy investors? Apple stock has already declined 50% year-to-date due to macro-economic concerns, but so far sales of Apple products have actually held up pretty well. So well, in fact, that some view it as a gauge for consumer confidence -- has confidence been shaken that much that even Apple sales have started to suffer?

Many, then, will focus more than anything on Apple's estimates for the current quarter and how it's been affected, or may be affected by the economic downturn.

Tags: aapl, apple, earnings

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Reader Comments (Page 1 of 1)

10-20-2008 @ 8:49PM

Barry Summerlin said...

No zealots yet, Mels.

10-21-2008 @ 9:01AM

Beltway Greg said...

After NPD's report that sales of Macs "surged" 19% yoy and the supposedly dead on arrival IPod improved by 7% I expect Apple to report per share earnings of $1.23. Now where do we go from here? Don't sweat the small stuff because regardless of whether the stock trades up, down, or sideways in the after-hours you'll probably get the chance to revisit the $100 level a few times in the coming months. I doubt very seriously that this will signal an "all-clear" and the market will fly like an eagle, to quote Steve Miller, not because of the company, hey things couldn't be better for Apple, but because of the macro issues we're facing as a country. Apple has done nothing wrong except innovate and out-preform at the wrong time in history. Hedge funds are still liquidating and raising capital and until that abates consternation and confusion will be the disorder of the day. This will limit the effects of a positive earnings pop either at 4:01 or in the coming days. Oh, and did I mention Dr. Oppenheimer's gloom and doom forward guidance. If I'm anywhere near correct on earnings Oppenheimer should be dismissed immediately. In this market misrepresenting the upside is just as bad as misrepresenting the downside.

Don't do anything today you'll regret tomorrow or cannot live with for at least a couple of months. And, if your seriously overweight, it's time to trim your position. (Live to trade another day, and yes there will be other opportunities.)And if you're fat go for a walk.

Beltway Greg

10-21-2008 @ 1:32PM

aapl guidance said...

Apple always lowballs there estimates though anyway. It's gonna be a long time before Apple gains back that 50% loss but I think there earnings release will at lease be the boost investor sentiment needs right now considering its looking pretty bearish (http://www.predictwallstreet.com/forecast.aspx?symbol=AAPL). I predict AAPL up today.