Apple (AAPL) Q2 Preview: The Worst is Expected, But is an iSurprise in the Cards?
Tweet
Share
E-mail
Get Alerts AAPL Hot Sheet
Price: $309.35 -0.63%
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Apple (Nasdaq: AAPL) shareholders have endured a 43 percent fall-from grace since September 2012. Those investors still around are hoping for the best when the company reports second quarter 2013 results tonight. All signs, however, point to a weak quarter.
Wall Street has been busy ratcheting down expectations of late. Still, some think the EPS consensus of $10.07 and revenues consensus of $42.59 billion may still be too lofty. The company for its part provided Q2 revenue guidance of $41-$43 billion with its Q1 report. They also provided gross margin guidance between 37.5 percent and 38.5 percent.
Based on data at StreetInsider.com's EPS Insider, Apple has beat EPS expectations twice and missed twice over the last four quarters. The average EPS beat rate over the last four quarters is +3.5%. The average percent move 1 week after earnings over the last four quarters is a drop of 2.1%. EPS this quarter is seen at a drop of 18.1% and revenues is seen growing 8.6%.
Maybe more important than second quarter results will be third quarter guidance. The consensus is calling for EPS of $9.08 and revenues of $39.43 billion for Q3.
Beyond financial results, iPhone and iPad sales will be key. Wall Street, on average, is looking for iPhone unit sales of 34 million and iPad units of 18.5 million.
Looking at some specific analyst commentary heading into the results:
Sterne Agee's Shaw Wu: "Since we cut numbers in mid-March, consensus estimates have come down a bit. We continue to believe AAPL will likely hit the lower-end of its guidance meaning consensus estimates may still be a little high. However, we believe expectations for the June quarter have come down adequately to reflect an inventory drawdown and pause ahead of 2H refreshes. The good news is that data points appear to be hitting a bottom." Buy rating $610 price target.
Jefferies' Peter Misek - "For CQ1 we think Apple likely achieved the low end of guidance but that results will be below consensus and see substantial downside to CQ2 consensus. After our Asia trip we now think the low-cost iPhone launch could be pushed to CQ4 and have increased confidence that the iPhone 6 will not launch until CY14. We maintain our below-St estimates; our FY14 ests are 20% below St for EPS driven by GM 300bp below St and iPhone ASP -15% Y/Y... We est $41B/$9.52 Hold rating, $420 price target.
Goldman Sachs' Bill Shope- "We forecast revenues and EPS of $42.59 billion and $9.92 versus consensus of $42.66 billion and $10.12. As for product shipments, we are looking for the following: iPhones of 36.5 million, iPads of 16.0 million, Macs of 4.1 million, and iPods of 6.3 million. We lowered estimates on April 1, and we are maintaining the estimates we introduced at that time." Buy rating, $575 price target.
The good news for Apple shareholders is that much of the bad news on the quarter is priced in and the company could provide some surprises with the report and juice the stock.
1. While it is widely expected that the company will make an announcement about its new capital allocation plan, the consensus is that the company will make that announce on a different date. If Apple does make a buyback or raised dividend announcement with earnings tonight the stock will likely react positively.
2. If Apple meets or beats Q2 expectations and guidance is at or near Q3 expectations, unlike in past quarters, this would be viewed as a positive and the stock would likely react positivity.
3. If Apple announces or gives guidance on a new product or gives insight into the timing of its next iPhone launch, this would likely be viewed favorably and the stock would likely react positivity.
Apple normally reports results at 4:30PM ET. Check back at EPS Insider for analyzed results withing seconds of their release.
Wall Street has been busy ratcheting down expectations of late. Still, some think the EPS consensus of $10.07 and revenues consensus of $42.59 billion may still be too lofty. The company for its part provided Q2 revenue guidance of $41-$43 billion with its Q1 report. They also provided gross margin guidance between 37.5 percent and 38.5 percent.
Based on data at StreetInsider.com's EPS Insider, Apple has beat EPS expectations twice and missed twice over the last four quarters. The average EPS beat rate over the last four quarters is +3.5%. The average percent move 1 week after earnings over the last four quarters is a drop of 2.1%. EPS this quarter is seen at a drop of 18.1% and revenues is seen growing 8.6%.
Maybe more important than second quarter results will be third quarter guidance. The consensus is calling for EPS of $9.08 and revenues of $39.43 billion for Q3.
Beyond financial results, iPhone and iPad sales will be key. Wall Street, on average, is looking for iPhone unit sales of 34 million and iPad units of 18.5 million.
Looking at some specific analyst commentary heading into the results:
The good news for Apple shareholders is that much of the bad news on the quarter is priced in and the company could provide some surprises with the report and juice the stock.
1. While it is widely expected that the company will make an announcement about its new capital allocation plan, the consensus is that the company will make that announce on a different date. If Apple does make a buyback or raised dividend announcement with earnings tonight the stock will likely react positively.
2. If Apple meets or beats Q2 expectations and guidance is at or near Q3 expectations, unlike in past quarters, this would be viewed as a positive and the stock would likely react positivity.
3. If Apple announces or gives guidance on a new product or gives insight into the timing of its next iPhone launch, this would likely be viewed favorably and the stock would likely react positivity.
Apple normally reports results at 4:30PM ET. Check back at EPS Insider for analyzed results withing seconds of their release.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
- Bernstein remains bullish on SpaceX but sees challenges in telecom ambitions
- UBS says bull market has further to run
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Insiders' Blog, Trader TalkRelated Entities
Jefferies & Co, Sterne Agee, Dividend, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
