Technology
Will Apple's Earnings Report Be the Turning Point for Its Weak 2016?
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Apple Inc. (NASDAQ: AAPL) is scheduled to report its fiscal third-quarter financial results after the markets close on Tuesday. This iPhone giant may be one the favorite companies in the market; unfortunately, it has performed poorly so far in 2016. Some are predicting weaker sales going into this quarter, but the overwhelming analyst sentiment is positive. Could this be when Apple turns itself around in 2016?
The consensus estimates from Thomson Reuters call for $1.38 in earnings per share (EPS) on $42.09 billion in revenue. In the same period of last year, Apple posted EPS of $1.85 and $49.6 billion in revenue.
This company evolutionized personal technology with the introduction of the Macintosh in 1984, and it is among the leaders in the world in innovation with the iPhone, iPad, Mac, Apple Watch and Apple TV. Apple’s four software platforms — iOS, OS X, watchOS and tvOS — provide seamless experiences across all Apple devices and empower people with breakthrough services, including the App Store, Apple Music, Apple Pay and iCloud.
One advantage for investors with a good time horizon is that the tepid numbers the company has posted over the past two quarters and the so-so guidance largely have been factored in. Also some of the big-name sellers like Carl Icahn have been disclosed.
A recent RBC report noted that while this quarter should be in line with the lower expectations, the potential for some gross margin expansion in the next quarter is possible, and currency headwinds may start to abate as well. RBC also thinks the iPhone 7 upgrade cycle could be a positive, and with the overall iPhone declines moderating, and an outstanding valuation, there is support for the stock.
Ahead of the earnings report, analysts weighed in on perhaps one of the most followed stocks in the market:
So far in 2016, Apple has underperformed the broad markets, with the stock down nearly 7%. Over the past 52 weeks, the stock is down 20%.
Shares of Apple were trading at $97.65 on Tuesday, with a consensus analyst price target of $122.37 and a 52-week trading range of $89.47 to $123.91.
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