Earnings Forecast
Apple Inc. (AAPL) is set to announce its Q216 earnings today at 1:30 p.m. EST, with a conference call following at 2 p.m. Analysts expect the tech giant to report earnings per share of $2.00 and revenue of $51.97 billion, based on iPhone sales of perhaps 50 million units, which would mark an 18% decline in the year-earlier period. That would be $1.28 lower the $3.28 per share posted last quarter and $0.33 lower the $2.33 posted in the Q215. Revenue is projected to be $6.03 billion lower than the $58 billion posted in the same period a year earlier. Meanwhile, EarningsWhisper.com reports a whisper number of $2.04 per share.
As a quick reminder, Apple reported Q116 EPS of $3.28, $0.05 better than the Street’s consensus estimate of $3.23. Revs increased 1.74% year-over-year to $75.9 billion versus the $76.59 billion consensus.
Since Apple’s first-quarter earnings report in January, analysts have grown more skeptical about the co.’s top-line growth going forward. According to KGI Securities Ming-Chi Kuo, one of the most widely-known Apple analyst, Cupertino may end up among top 5 worst-performing smartphone brands of FY 2016.
“While we believe the high-end smartphone market still has room for growth, the development of a newer, more innovative user experience is a prerequisite for growth,” Kuo wrote, adding that out of Samsung, Apple, Huawei, Oppo and Vivo, only Apple will see shipments fall year-on-year in 2016.
Dr. Hannu Verkasalo, CEO of Verto Analytics said in a research note that …”in the context of the past years, [Apple] sales are flat in the U.S. and other Western markets, and they are facing saturation – which the new smaller device models have barely made an impact.” According to Verkasalo, “[t]he drivers for future performance of Apple will be in the foreign markets where they do not yet face saturation, and in their iOS user base and monetizing that better in more developed markets. In the U.S. they have 91m mobile users using Apple mobile devices, and all together Apple reaches monthly 124m consumers in the US with their services and apps. For Apple to grow here in the U.S. and other developed markets, they need to successfully monetize their user base outside of the revenue streams coming from device sales and current Apple app store payments.”
Trading metrics
AAPL stock, currently valued at $581.24 billion, has a median Street price target of $130 with a high target of $200. In the past 52 weeks, shares of the tech giant have traded between a low of $92 and a high of $134.54, with the 50-day MA and 200-day MA located at $106.83 and $107.23 levels, respectively. Additionally, shares of Apple trade at a P/E ratio of 11.16 and have a Relative Strength Index (RSI) and MACD indicator of 43.77 and -2.80, respectively.
Apple Inc currently prints a year-to-date return of 0.37%. The name has increased 5% from three months ago, underperforming the Dow Jones, which is up nearly 12%.
AAPL stock is down 19.62% on a year-over-year basis.
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