Apple Gets Polished Ahead of Results – Wall Street Journal
When the technology stalwart unveils its fiscal fourth-quarter results on Tuesday, its annual revenue and net income are expected to log a drop for the first time since 2001. Innovations such as the iPod, iPhone and iPad have led Appleâ€™s revenue to surge more than 40 times over that 14-year period, catapulting Apple to the worldâ€™s biggest company by market value.
Apple is expected to record $215.6 billion in revenue for its fiscal year ending Sept. 24. That is more than Greeceâ€™s entire gross domestic product. But it would also be down about $18 billion, or 8%, from a year ago. That decline, alone, would be about triple Appleâ€™s total revenue in 2001.
That hasnâ€™t stopped investor sentiment from improving in recent months. And just like in July, when Appleâ€™s results exceeded Wall Streetâ€™s diminished expectations, the companyâ€™s coming results have another low bar to clear.
Analysts polled by FactSet estimate earnings of $1.66 a share for the fiscal fourth quarter. That forecast was $2.11 at the beginning of the year, but has fallen ever since. The consensus forecast from Estimize, which crowdsources earnings estimates from buy-side analysts, hedge-fund managers and others, is slightly higher at $1.71 a share.
Sales of the iPhone, which make up roughly two-thirds of overall revenue, are the key figures to watch. Results will include the new iPhone 7 and 7 Plus, which were released with two weeks left in Appleâ€™s quarter. Apple didnâ€™t provide early sales figures, but evidence points to decent demand. It could get an additional boost following Samsung Electronics Co.
â€™s exploding smartphone devices and ensuing product recall.
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Apple investors shouldnâ€™t expect a repeat of this yearâ€™s fortuitous events. The next iPhone is expected to debut in fall 2017, marking the 10th anniversary of the device. Expectations are high that the new phone will be a game changer. Analysts are modeling Appleâ€™s overall revenue will regain steam in 2017, growing 5% from a year earlier.
Apple shares have risen more than 25% since the July earnings report. Solid sales numbers for the iPhone could boost them further. Fetching 13 times projected earnings projected over the next 12 months, Appleâ€™s multiple remains far cheaper than those of Alphabet Inc.,
, Amazon.com Inc.
or Facebook Inc.,
which round out the top five biggest S&P 500 companies by market value.
The good times may last a while, but Apple will face higher and harder-to-beat expectations in the coming quarters.
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