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AAPL Weak Ahead Of Earnings
Shares of AAPL are lagging the broader market ahead of June earnings to be released tomorrow, July 20, 2010 at 5:00 p.m ET. The stock has declined nearly 10% from its recent highs in June as the company has struggled with negative iPhone 4 press. With a resolution underway, potential catalysts include monthly NPD data (Mac / iPod business); iPhone and iPad sales and unit updates; and possible entry into the TV market. AAPL trades at 21x estimated fiscal-year 2010 EPS and 12x Enterprise Value / Trailing Twelve Months Free Cash Flow.
LIVE Second Quarter Earnings Coverage (Business Insider)
Apple will release second quarter earnings results tomorrow after the market close. Join us at 5:00 pm ET at SAI for live coverage and commentary.
Wall Street Applauds Resolution Of Antenna Issue, Looks Towards Earnings (Various)
Post-iPhone 4 conference call and ahead of the quarter:
- Gene Munster at Piper Jaffray believes Apple’s concession to offer free cases to all iPhone 4 buyers was the best possible decision for the company. He estimates the worst financial case for this solution (100% take rate for the cases at 36 million phones at $5 per case) will cost the company $178.5 million or 1% operating income. Peanuts in the scheme of things. He reiterates his Overweight rating and $351 price-target.
- Morgan Stanley analyst Katy Huberty believes the loss of accessories revenue plus the cost to provide free cases could cost Apple up to $0.16 per share in the September quarter and is lowering estimates accordingly. There are three catalysts that can swing investor sentiment back on track: 1) stronger than anticipated June earnings; 2) improved quality and supply of iPhone 4; and 3) stronger than anticipated iPhone and iPad units sales with positive margin trends in the second half of the year. She reiterates her Overweight rating.
- Mike Abramsky at RBC Capital believes that Apple will beat numbers tomorrow on better than anticipated iPad sales and is increasing his estimates. He is expecting revenue of $15.2 billion (versus the Street at $14.7 billion) and EPS of $3.20 (versus the Street at $3.10). Mike believes his Outperform thesis remains and there continue to be large market opportunities ahead.
Investors Sour On Apple; Sentiment Down (Piqqem)
Jett Winter at Piqqem has released a timely report showing a sharp decline in investor opinion as measured by his crowd-driven stock selection service. Apple’s current sentiment rating is 34.6. While still positive, it is down from this years peak at 58.0. Recent events have sure taken their toll.
How Will The Stock React Tomorrow? Who Knows. (Learning Markets)
As investors prepare for Apple earnings, a profit of $3.09 per share is already priced into the value of the stock as expectation. If earnings come in at that level, the stock will not likely move all that much unless the company changes its future outlook. But upside to expectations won’t necessarily lead to a higher price as investors sell on the good news. That dip could create a buying opportunity, however.
Daily Trader: Apple Heading Lower (The Street)
Apple has been range-bound between $250 – $255 leading up to options expiration and the iPhone 4 antenna debate. The stock has been losing buyers the last two months and there has been a strong “sell on the news” reaction recently. With earnings tomorrow, the stock could test lows of May around the $230 range creating a long-term buying opportunity on the deep dip.
Apple Closing In On Microsoft’s Revenue (Fortune)
While Apple has maintained a larger market capitalisation than Microsoft since taking over in May, the media company has historically generated and earned less than the software giant. That could all change tomorrow when Apple reports earnings. Though these companies no longer operate in the same space as they once did (much to Microsoft’s dismay), it’s still a rivalry of rivalries.
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