Apple Earnings Preview: Can It Beat Higher Expectations?
Apple Earnings Preview: Can It Beat Higher Expectations?
By:Mike Butler
The company’s stock is up over 30% this year, and the timing of the new iPhone launch could benefit its earnings call
- Apple will report quarterly earnings on Nov. 2 at 3:30 p.m. CDT.
- The tech giant is expected to report earnings of $1.39 per share on $89.31 billion in revenue.
- Earnings per share and revenue estimates are both significantly higher than last quarter.
- The timing of the new iPhone launch could benefit this earnings call, but global tensions still loom.
Apple (AAPL) stock opened 2023 at $130.28, and it's been smooth sailing to the upside for most of the year, reaching a peak price of $198.23 on July 19. But it's currently sitting in the middle of the price range at $173.69. The stock is still up over 30% on the year even though it's trading well below the high of the year.
Apple is expected to report earnings per share (EPS) of $1.39. That’s $0.20 higher than last quarter's estimate, which Apple beat by 5.49% after reporting EPS of $1.26.
Revenue estimates are also much higher at $89.31 billion, compared to the previous quarter's estimate of $81.80, which Apple met.
The stock price's expected move through the earnings announcement based on current implied volatility is +-$7.38, which is less than 5% of the current stock price. That’s low compared to other big-name tech stocks and their expected moves for upcoming earnings.
Many analysts are concerned about international sales of new and existing iPhones, specifically in China. But I'm not certain the market is worried, given that EPS and revenue numbers are expected to be so much higher than last quarter.
Bullish on Apple earnings
As with any other tech stock, all eyes will be on Apple stock after the market closes Nov. 2. The fact Apple has met or beaten revenue and EPS estimates three of the past four quarters tells us it has consistently outperformed expectations, but expectations are higher this time around.
Higher estimates mean a greater outperformance is necessary for the stock to really take off to the upside. That concerns some analysts. If you think it can beat an already high earnings estimate, it could mean good things for bulls on Apple stock, especially if guidance for the rest of the year is positive.
Bearish on Apple earnings
Apple stock is such a darling in the eyes of everyday investors that the public looks for any reason to buy it. But with such a low expected move for the stock price this quarter, and a sizable increase in EPS and revenue estimates, the tech giant really must blow earnings out of the water to beat expectations this time around.
Apple also struggled to keep revenue elevated on its income statement the past few quarters, which is concerning for such a household-name tech stock. If you're bearish on Apple earnings and think that a miss in either EPS or revenue could send the stock tumbling, an increased expectation for both figures isn't the worst setup for an earnings selloff!
Tune in to Options Trading Concepts Live on Thursday Nov. 2 at 11 a.m. CDT for a full earnings strategy breakdown ahead of the announcement.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.