Apple is expected to join the club for $ 100 billion in revenue when the profits are released
Did anyone say $ 100 billion? And then a little? Wall Street analysts did. Consensus sees Apple Inc. (NASDAQ: AAPL) as joining those sparse corporate crowds that broke the $ 1
00 billion mark on quarterly revenue when it opened books on Wednesday on its fiscal Q1. This is a record for AAPL, of course, and may have been helped by holiday sales of its new iPhone 12. But it’s one of a series of fresh highs that AAPL has achieved in a year – one that the company has acknowledged to be. shaken by adversity in many corners. Chief Financial Officer Luca Maestri said the strong results in last quarter’s report were due to “the incomparable loyalty of our customers.” This may or may not be true, but when AAPL reports revenue, investors will also listen to how well AAPL plays the game for market share. The “work from home” trend fueled by the pandemic appears to have changed the AAPL game, according to Morningstar analysts, who believe it has boosted sales of iPads, desktops and laptops. All this can be overshadowed in fiscal Q1 by the holiday sales of the iPhone 12, which can probably be said to receive a fair share of attention on Wednesday afternoon after the closing bell. The AAPL has always attracted attention as the earnings season rolls, and now, with a market capitalization of $ 2.34 trillion and reaching new peaks in stock prices, it looks set to surely take its place in the spotlight, even when is up against a host of other known technology stock results this week. Tesla Inc (NASDAQ: TSLA) and Facebook, Inc. (NASDAQ: FB) reported the same afternoon. Numbers Wall Street analysts expect AAPL revenue to jump 12 percent year-over-year to about $ 103 billion, according to FactSet. But some companies, such as Loup Ventures, are looking for much stronger figures: 19% to $ 109.5 billion. In terms of earnings, Street reached a consensus of $ 1.41 per share. Morgan Stanley (NYSE: MS) also forecasts a high consensus side, with revenue of $ 108.2 billion and earnings per share of $ 1.50. “Our recent talks suggest that investors expect Apple to release solid but not good results for the December quarter,” analysts at Morgan Stanley wrote in a recent report. “We disagree and believe that Apple is likely to record record quarterly revenue and revenue. “We think the iPhone 12 is Apple’s most successful product in five years,” they said. More on that later. No matter how you look at it, the numbers look stable. The AAPL innovation machine stopped giving guidance last year – something like many other companies, unsure of the effects of COVID-19 on their sales. In March, no one knew what the rebound effects of the pandemic might be or how long it could last. We do not yet know all this, but we have found that the quarantines provided by the city and the state and the general fear of publicity have helped the rapid advancement of many trends that were already gaining momentum. The digital transformation has accelerated and it seems that AAPL may have been well positioned for it. While the iPhone 12 may have garnered most of its attention on Wednesday, consider the last quarter when CEO Tim Cook set all-time records for Mac and services. Although he did not offer guidance for the last quarter per se, he offered double-digit gains for all product categories except the iPhone 12, which he said would achieve single-digit gains. FIGURE 1: APPLE LEAVES INDEX IN POWDER. Over the past year, shares of Apple (AAPL – candlestick) easily overtook the Nasdaq-100 (NDX – purple line). Apple’s shares started fast in 2021, and investors were obviously enthusiastic about the prospects for tomorrow’s profit for Q1. Data source: Nasdaq. Source of the diagram: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Previous performance does not guarantee future results. Launch of the powerful iPhone 5G Despite all the happy talk about revenue from fiscal Q4, weaker-than-expected iPhone sales offset the joy and reduced shares by nearly 6% in the first few days after the October gains. They have since recovered. AAPL reported iPhone sales of $ 26.4 billion in the fiscal quarter, below Street’s expectations of $ 27.73 billion. Much of this shortfall is due to AAPL’s decision to launch the iPhone 12 in this final quarter, a move many believe may have led to consumers waiting for the upgrade before buying. Then some analysts said that the transition to 5G could be a tailwind for the iPhone 12 with sales promotions and subscription packages. This, combined with the important holiday shopping season that was about to begin, could lead to a quick start for the new phone. Now we’ll see if they were right. Analysts are mostly meeting their expectations for iPhone sales, with some saying the slowdown could have pushed about $ 4 billion in iPhone sales by the quarter of December compared to fiscal Q3. Street’s consensus last stood at $ 59.58 billion, better than 6% year-on-year. But Loup Ventures thinks it’s conservative. It is looking for sales that will store 16% on an annual basis to 64.9 billion dollars, jumping to 59% of total sales compared to the typical iPhone 50% of sales. It is not clear if this will really be the case, but if it is, it will reverse the trend in recent years for the iPhone to be smaller than AAPL’s total revenue. The company emphasizes the growth in services. Remember, we are only two years from January 2019, when Cook sent a letter to AAPL investors warning of a lack of fiscal revenue for the first quarter, in part due to weak iPhone sales in China. How things have changed. AAPL Revenue and Options Activities AAPL is expected to report an adjusted EPS of $ 1.41, compared to $ 1.25 in the previous quarter, according to consensus estimates by third parties. Revenue is projected at $ 103.01 billion, up 16.4 percent from a year ago. The options market estimates the expected stock price move of 6.2% in both directions around the release of profits, according to the Market Maker Move ™ indicator on the thinkorswim® platform. In view of the expiration of the options on January 29, putos are active in 125 and 135 strikes. But it was less than activity to promotions, a large volume of calls in 145 and 150 strikes. The default volatility is at the 34th percentile on Tuesday morning. Note: Call options represent the right, but not the obligation, to purchase the underlying security at a predetermined price for a specified period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price for a specified period of time. Homework and its tools The phenomenon of work and study from home helped boost Mac and iPad sales last year, and analysts widely expect this trend to continue in fiscal Q1. A number of bells and whistles have been added to the new iPad and iPad Airs, and new computers have appeared on the market with a custom MAP chip from AAPL, replacing the chip Intel Corporation (NASDAQ: INTC). AAPL is also reportedly working on a new iPad Pro, which is expected to be released in mid-March. Wall Street also said that AAPL may have patented a new version of the Magic Keyboard for the iPad Pro. Given Cook’s comments on “the most fruitful period of product introduction,” analysts widely expect to hear about other new products available online. The MacBook Air update is one of those possible developments. AAPL is working on a thinner and lighter version of the MacBook Air, Bloomberg reported late last week, citing “people with knowledge of the subject. Analysts say they want to know if the planned edition in the second half of this year is on the way. Analysts from Monness, Crespi, Hardt & Co. AAPL expects to shed light on several new products and services, including sales of its $ 549 AirPods Max in-ear headphones and Apple Fitness + subscription offerings, as well as ways to combine services together for a discount. “In our opinion, Apple’s portfolio was positioned better than ever in the last holiday season, while product and service updates position Planet Apple well in 2021,” the team wrote. And much more Among the myriad reasons, AAPL’s revenue is a magnet that goes beyond products. Other factors underlining the company’s progress range from privacy concerns to application developer fees to government intervention and the overall economy. AAPL has done a lot to solve many of these problems, but each quarter tends to present a new crop. In November, for example, AAPL said it would halve the commissions it charges on smaller developers who sell software through the App Store and generate sales below $ 1 million. The original 30% AAPL claim has long fueled complaints from developers, consumers and governments about its dominance in the digital world. The price cuts of up to 15% have reassured some, but not all, stakeholders and analysts that the company hopes to address the way the cuts have developed in the first few weeks. Another revenue issue is the monetary position of the AAPL. Total cash was about $ 192 billion at the end of the company’s fiscal Q4, with about $ 112 billion in debt and just over $ 79 billion in cash. AAPL returned nearly $ 22 billion to shareholders in the form of repurchases and dividends. Investors can expect to continue to see more than that ahead, according to Loup Ventures, which says an additional $ 73 billion will be returned in the coming years. TD Ameritrade® comment for educational purposes only. Member of SIPC. The options involve risks and are not suitable for all investors. Please read Features and Risks of Standardized Options. Photo of Trac Vu at Unsplash See more of Benzinga Click here to trade options from BenzingaBoeing Earnings ahead: Watching job cuts, space costs and the new “unreasonable” 737 MAXEarnings Continue with Johnson & Johnson, 3M early, followed by Microsoft on latest © 2021 Benzinga .com. Benzinga does not provide investment advice. All rights reserved.