Apple's June quarter predicted to be 'neutral event' for stock price, 'good enough' for investors

Posted:
in AAPL Investors edited July 2016
Tuesday's earnings report from Apple is expected by Wall Street analysts to be essentially a non-event -- nothing serious enough to make the stock price jump, but also nothing negative enough to see shares slide significantly.




Previewing Apple's June quarter results, Gene Munster of Piper Jaffray told investors that low expectations will likely make the company's Tuesday earnings call a "largely neutral event." He believes Wall Street expects Apple to report an in-line June quarter, and to guide sales down about 5 percent for the following September quarter.

Separately, analyst Timothy Arcuri of Cowen and Company also issued a note forecasting "not great but good enough" June quarter earnings from Apple. He noted that while investors currently have a negative outlook, he sees that changing to "cautious optimism about the future."

Wall Street consensus, according to Piper Jaffray, sees Apple's June quarter revenue at $42.2 billion, with gross margins of 37.9 percent. The market expects Apple to have sold about 40 million iPhones, 9.1 million iPads, and 4.4 million Macs.




Looking forward to the September quarter, market consensus hopes to see Apple guide $46 billion in revenue and 38.3 percent gross margin. Expected iPhone sales for the quarter are at 43.1 million.

Piper Jaffray's own estimates for the June quarter are slightly above the market, projecting revenue of $42.3 billion and gross margins at 38 percent. Cowen and Company, meanwhile, is on the lower end with $41.8 billion in revenue.

Apple will report the results of its fiscal third quarter of 2016 on Tuesday after markets close. The company has scheduled a earnings call with analysts and members of the press for 2 p.m. Pacific, 5 p.m. Eastern, and AppleInsider will provide full, live coverage of the event.

Comments

  • Reply 1 of 10
    asdasdasdasd Posts: 5,105member
    Its next year we have to worry about until the new iPhone designs come out. 
  • Reply 2 of 10
    SpamSandwichSpamSandwich Posts: 29,906member
    The company continues to haul in unprecedented profits, yet Tim cannot cheerlead enough to get the stock back up over $100.
    anantksundaram
  • Reply 3 of 10
    slprescottslprescott Posts: 743member
    asdasd said:
    Its next year we have to worry about until the new iPhone designs come out. 
    The silver lining may be that Wall Street values a stock based on FUTURE earings potential... and delaying a major upgrade of the iPhone to next year pushes it into that 'future' category.  Possibly Wall Street will view that as a positive (for next year)?
    edited July 2016
  • Reply 4 of 10
    mubailimubaili Posts: 377member
    there is no such thing as neutral event for stock price. It will drop at least 5% if the iPhone sales disappoint.
    kermit4krazyjony0
  • Reply 5 of 10
    Not a chance. They will absolutely miss estimates and the stock will take a 5-10% beating, regardless of the PE ratio. Prospects just aren't sounding good. There were no worthwhile hardware updates in the June quarter, and watch sales fell off a cliff. China sales are in free fall, and people are dying to jump out of the stock at this point, at least to wait until they see the next iPhone. 
  • Reply 6 of 10
    palominepalomine Posts: 359member
    The company continues to haul in unprecedented profits, yet Tim cannot cheerlead enough to get the stock back up over $100.
    Nobody can change the way AAPL is traded except the big boys. The stock is hog tied.  
    Perhaps when these large options traders get tired of single dollar movements they will move over to another name to trade.

    i think it is less about "respect" and more about trading this stock because it IS a reliable money maker that always earns close to or better than its official forecasts. It is used widely as a backstop to all the other trading they do. All the big traders have to do is gin up another headline out of stale news, to aim the price where they want it for their options. There are so many doing it now that the stock won't move much. I wonder who is top dog and controls the most?

    Wondering why the stock price is so low despite earnings is pointless. I'm hoping another name will supplant it, but am resigned to selling as little as possible until the car project gets going. Or I could just give up and try something else.
    kermit4krazyjony0badmonkDeelron
  • Reply 7 of 10
    512ke512ke Posts: 771member
    Selling more and more iPhones is a tough challenge, in part because the difference between an iPhone and a top Android phone grows smaller every year.

    However, Apple has a great culture, enviable profits, and a bigger war chest than its competitors. Apple doesn't have to hit the ball out of the park every single quarter. I'm keeping the majority of my position in APPL. I think long term the company will continue to succeed. 

    Just st one investor's opinion. :)
    badmonk
  • Reply 8 of 10
    512ke said:
    Selling more and more iPhones is a tough challenge, in part because the difference between an iPhone and a top Android phone grows smaller every year.
    The BIG difference is that Google does not know your every move with an iPhone.
    That is worth lots to me.

  • Reply 9 of 10
    rogifan_newrogifan_new Posts: 3,239member
    BCG just downgraded Apple to sell. I don't agree but if this is a weak quarter and we get nothing on the call from Cook signaling better days ahead I expect the stock to get hammered.

    http://blogs.barrons.com/techtraderdaily/2016/07/25/apple-sell-says-bgc-as-the-muse-has-gone-elsewhere-peak-tim-cook/?mod=yahoobarrons&ru=yahoo

    We mention peak Tim Cook happened on February 23, 2015 when Apple reached a record valuation of $775 billion. This quarter we expect iPhone revenue to decline for its third consecutive quarter, while iPad revenue has declined for an astonishing 9 consecutive quarters. The stock has lost approximately $235 billion in value while repurchasing $117 billion is shares. The share repurchases over the last 6 quarters have all occurred at higher average prices than where the stock is currently trading. Domestic cash has been depleted to $24 billion, overseas cash is not deployed, and debt has increased to $72 billion.


    kermit4krazy
  • Reply 10 of 10
    BCG just downgraded Apple to sell. I don't agree but if this is a weak quarter and we get nothing on the call from Cook signaling better days ahead I expect the stock to get hammered.

    http://blogs.barrons.com/techtraderdaily/2016/07/25/apple-sell-says-bgc-as-the-muse-has-gone-elsewhere-peak-tim-cook/?mod=yahoobarrons&ru=yahoo

    We mention peak Tim Cook happened on February 23, 2015 when Apple reached a record valuation of $775 billion. This quarter we expect iPhone revenue to decline for its third consecutive quarter, while iPad revenue has declined for an astonishing 9 consecutive quarters. The stock has lost approximately $235 billion in value while repurchasing $117 billion is shares. The share repurchases over the last 6 quarters have all occurred at higher average prices than where the stock is currently trading. Domestic cash has been depleted to $24 billion, overseas cash is not deployed, and debt has increased to $72 billion.


    Things are looking up! /s
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