Impressive quarter expected for Apple as shares soar

Apple is anticipated to report another dazzling quarter on Tuesday, propelled by strong demand for its perennial bestselling iPhone and the new, thinner iPad 2 tablets.

Apple shares rose nearly 2.5% on Monday to close at a record high of $373.80 on expectations that the company will beat analysts’ forecasts for the fiscal third-quarter, which saw an easing of the supply constraints surrounding the iPad 2.

The stock, which touched an all-time high of $374.65 earlier in the session, appeared to have emerged out of the limbo it has been in since chief executive Steve Jobs took leave last January for unspecified medical reasons.

JPMorgan Securities’ derivatives strategists on Monday recommended purchasing Apple August $365 call options to position for a potential upside ahead of the company’s quarterly earnings. The options market is implying a 2% earnings move up or down for the stock.

Investors are looking for a 60% increase in revenue for the June quarter but all eyes will be on the outlook for the second half of the year, which Wall Street is betting will be huge as it may include the launch of a new iPhone, its best-selling product that accounts for about 40% of its revenue.


Forecasts
“We are more positive on the outlook for share acceleration in the second half as it is reasonable to expect multiple hardware refreshes combined with the back-to-school and holiday shopping quarter,” said BGC analyst Collin Gillis, who raised his price target on the stock to $430 from $390.

The world’s most valuable technology company is ultraconservative with its forecasts. Investors will pick apart executives’ comments to figure out how much the eagerly awaited new iPhone will boost revenue.

Apple likely sold between 17-million and 18-million iPhones during the quarter along with about 8-million iPads, according to analysts, who also expect lower component prices to boost gross margins to as high as 41%.

Apple is expected to report earnings of $5.84 a share on revenue of $24.9-billion, according to Thomson Reuters I/B/E/S. Apple has beaten Wall Street estimates for 13 straight quarters.

According to StarMine’s SmartEstimate, which places more weight on recent forecasts by top-rated analysts, Apple should post EPS of $6.006 on revenue of $25.3-billion. — Reuters

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Poornima Gupta
Poornima Gupta works from San Francisco. Exec Comms @ebay. Former @reuters Tech Correspondent. Still an amateur pundit. Constant gardener. Yoga warrior. Poornima Gupta has over 2606 followers on Twitter.

Related stories

WHO urges calm as China coronavirus death toll reaches 2000

More than 74 000 people have now been infected by the virus in China, with hundreds more cases in some 25 countries

How deep can you go in 15 minutes with Ebro?

M&G sat down with ‘Old Man Ebro’ during his Apple Music trip to SA, to see what a few minutes of conversation could produce. Apparently, a lot...

Sasol share price spikes as bosses ousted

The company’s share price rose more than 12% in morning trading on Monday when its joint chief executives resigned

Apple pulls Hong Kong app used by protesters after China warning

The tech giant's pulling of HKmap.live was blasted as bowing to China

How to (kind of) make it as a M&G columnist

There will be rejection in the form of no replies, which will haunt you for days. Keep going.

The computer-human relationship is evolving

Many of us already talk to our computers and soon they may suggest better ways for us to work
Advertising

Subscribers only

Toxic power struggle hits public works

With infighting and allegations of corruption and poor planning, the department’s top management looks like a scene from ‘Survivor’

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

More top stories

Vitamin therapy is for drips

It may be marketed by influencers, but intravenous vitamin therapy is not necessary and probably not worth the hype, experts say

Facebook, Instagram indiscriminately flag #EndSars posts as fake news

Fact-checking is appropriate but the platforms’ scattershot approach has resulted in genuine information and messages about Nigerians’ protest against police brutality being silenced

Murder of anti-mining activist emboldens KZN community

Mam’Ntshangase was described as a fierce critic of mining and ambassador for land rights.

Unite with Nigeria’s ‘Speak Up’ generation protesting against police brutality

Photos of citizens draped in the bloodied flag have spread around the world in the month the country should be celebrating 60 years of independence
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday