Apple Earnings Approach

S&P 500 (NYSE:SPY) component Apple (NASDAQ:AAPL) will unveil its latest earnings today, Thursday, October 25, 2012. Apple offers a range personal computers, mobile devices, and portable digital music and video players. The company also sells related software, services, peripherals, and networking solutions.

Apple Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of $8.93 per share, a rise of 26.7% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $10.19. Between one and three months ago, the average estimate moved down. It has risen from $8.88 during the last month. Analysts are projecting profit to rise by 60.3% compared to last year’s $44.37.

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Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the third quarter, the company reported profit of $9.32 per share versus a mean estimate of net income of $10.35 per share. In the second quarter, the company beat estimates by $2.27.

Wall St. Revenue Expectations: Analysts predict a rise of 28.2% in revenue from the year-earlier quarter to $36.23 billion.

A Look Back: In the third quarter, profit rose 20.7% to $8.82 billion ($9.32 a share) from $7.31 billion ($7.79 a share) the year earlier, but fell short analyst expectations. Revenue rose 22.6% to $35.02 billion from $28.57 billion.

Stock Price Performance: Between September 21, 2012 and October 19, 2012, the stock price dropped $90.25 (-12.9%), from $700.10 to $609.84. The stock price saw one of its best stretches over the last year between February 2, 2012 and February 14, 2012, when shares rose for nine straight days, increasing 11.9% (+$54.34) over that span. It saw one of its worst periods between July 19, 2012 and July 26, 2012 when shares fell for six straight days, dropping 6.4% (-$39.44) over that span.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 48.4% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose more than twofold in the first quarter and 94.1% in the second quarter before increasing again in the third quarter.

Analyst Ratings: With 38 analysts rating the stock a buy, none rating it a sell and one rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.57 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.58 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 3.2% to $33.06 billion while assets rose 2.4% to $51.94 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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