Will Apple Deliever an Outstanding Report? | Earnings Preview
$Apple(AAPL.US$ is expected to announce its finscal Q4 2020 financial results after the market closes on Thursday (October 29). You can listen to the earnings call directly in the moo community to get first-hand information. Follow @moo_Live and stay tuned!
Apple announced very promising Q3 results with both revenue and net profit exceeded expectations in July. Apple's stock price then hit a record high.
Due to the late launch of this year's iPhone 12, the coming financial report will not include data related to the new iPhone. However, as the service department has become more and more important in Apple's product system in recent years, and the sales of Mac and Ipad have both increased during the pandemic, there are still bright spots worth paying attention to in this financial report.
According to Bloomberg’s expectations, Apple’s Q4 revenue is estimated at $63.35 billion and an adjusted net profit of $12.12 billion. Since the release of the iPhone12, Apple’s stock price has dipped. As of the close of this Tuesday, Apple closed at 116.6, marked a 2.88% fall cumulatively since the 12th Oct.
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Red__Bull : One thing I've learned in my 15 years of owning AAPL is that analysts forecasts are usually wrong about earnings reports and product launches. Take that as you will, but I was also up close (not insider close but close), working in the industry for 20 yrs.
Kenkkk Red__Bull : Interesting, but why? Is the analyst too confident on the reports?
Kittykiki : I believe the ER will be outstanding
Red__Bull Kenkkk : Sorry for the very late reply. There are several factors at play:
1. Wall St. regularly panics that the cellular industry in generally is saturated. "Everyone has a phone now, so no more customers and growth". Wrong. I've heard this SO many times during my telecom career. But they always innovate to grow. It's not just about subscribers and new phones. All wireless companies have hundreds of billions in infrastructure that can be leveraged for new technologies.
2. AAPL specific: Analysts, "Oh, no! They didn't sell as many Iphone (pick a version) as we expected. AAPL's innovation has plateaued." I've spent countless nights over two decades monitoring ordering systems for AAPL product launches. Hundreds of thousands are up at wee hours waiting for the 3 AM pre-order gates to open. How many companies have that kind of following?
3. AAPL is cash-rich. They've always maintained a few hundred billion in cash. Easy for them to plow into R&D, acquisitions, etc.
4. AAPL is a highly visible stock. Experts and amateurs pour over it with a microscope leading to short term volatility. But long term charts show the real picture.
5. P.S. I'm not a high level insider who knows anything about AAPL's internal strategy, finances, etc. I never knew sales numbers during product launches, and never actively traded this stock. I just bought based on instinct, two buys more than a decade ago, and my former broker bought more a few years ago. Haven't sold any yet. Avg. cost basis $13 per share, 800% return.