Is Apple’s Earnings Trend Your Friend This Quarter?
Apple (NASDAQ:AAPL) reports earnings on January 24th. In order to be properly prepared, you must be aware of Apple’s recent earnings trend.
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Here’s your Cheat Sheet to Apple’s annual and quarterly earnings trends:
|Revenue ($) in millions||37,490||42,900||65,220||108,250||156,510|
|Diluted EPS ($)||6.78||9.08||15.15||27.68||44.15|
When looking at Apple’s earnings in the big picture, we can see why the stock has been Wall Street’s darling since the economic collapse. During that time, the stock has risen from a low of $82 to a recent high of over $705. With earnings as sweet as these, we don’t need a physicist to explain the driver for stock returns.
Here’s a big picture look at Apple’s technical chart since 2008:
However, to prepare for Apple’s upcoming earnings release, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data…
|Quarter||Sep. 30, 2011||Dec. 31, 2011||Mar. 31, 2012||Jun. 30, 2012||Sep. 30, 2012|
|Revenue ($) in millions||28,270||46,330||39,190||35,020||35,970|
|Diluted EPS ($)||7.06||13.87||12.30||9.32||8.66|
From this vantage point, the view is not as sweet. Earnings per share have been decreasing for three straight quarters. We prefer to see earnings increasing quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. In this case, Apple doesn’t pass our test at the moment. However, if Apple can increase earnings this quarter, we would gain confidence the stock is regaining composure for a longer term rally.
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