Close

All Eyes on Apple (AAPL) Into Q2 Print; FX, Capital Return Seen as Wildcards

April 27, 2015 12:27 PM EDT
Get Alerts TWX Hot Sheet
Price: $2.23 --0%

Rating Summary:
    15 Buy, 24 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 3 | New: 1
Join SI Premium – FREE

Apple (NASDAQ: AAPL) is set to report Q2 earnings after the close of trading today. Analysts on average are looking for the company to report EPS of $2.16 on revenues of $55.06 billion, representing year-over-year growth of 30.1% and 22.9%, respectively.

On average over the past four quarters, Apple has beaten the EPS consensus by +11.2%, and has seen an average 1-week move following earnings of +7.6%, according to data at EPS Insider. Last quarter, Apple beat the EPS consensus by +17.7% and saw its stock ramp +5.7% in the day immediately following earnings. Apple has traded higher the day following earnings in each of the past three quarters.

In addition to earnings today, investors expect to get an update on the company's capital return program with most expecting an increase in the dividend and the buyback.

Piper Jaffray analyst Gene Munster warned in a note to clients this morning that FX could weigh on results and guidance by 2-3%, although he said this is not reflected in the consensus. Excluding FX, the analyst expects Apple to report revenue in-line with the Street. Despite the FX hit, Munster said overall they believe there could be some modest upside to the rest of CY15 and CY16 based on iPhone market share declining at a slower rate than other cycles (share gains), which they believe helps the upside case for the stock.

On gross margin, Bernstein's Toni Sacconaghi sees gross margin of 39.8% versus consensus at 39.5% and guidance of 38.5% to 39.5%. However, BMO Capital analyst Keith Bachman is worried about FX and how it could impact June gross margin guidance. "Even with very strong gross margins in the March 2015 quarter, we believe management will guide June quarter gross margins to decline meaningfully on a q/q basis, driven by FX," he said.

On iPhone sales, Stifel analyst Aaron Rakers recently raised his estimates to 59.6 million iPhones, up from his prior 53.6 million estimate and the consensus of 54.9 million.

On the capital allocation plan, Bachman believes that Apple will increase the targeted cumulative capital allocation to the $160-170 billion range, to be used by the end of CY2016.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst EPS View, Earnings, Insiders' Blog, Trader Talk

Related Entities

Piper Jaffray, BMO Capital, Gene Munster, Earnings, Toni Sacconaghi