Apple (AAPL) to announce first quarter results: what’s next?
Apple AAPL is expected to release its results for the first quarter of fiscal 2021 on January 27.
The company has not provided any revenue forecast, given the uncertainty surrounding the impact of the coronavirus pandemic. However, the company expects first-quarter iPhone tax revenue to increase despite the late delivery of the latest iPhones.
Additionally, Apple expects all other products, in total, to see double-digit growth. Services are also expected to continue their double-digit growth rate in the quarter to be released.
Zacks’ consensus estimate for revenue is currently set at $ 102.61 billion, indicating 11.8% growth from the figure released a year ago.
Additionally, the consensus earnings mark is currently set at $ 1.39 per share, unchanged over the past 30 days and showing growth of 11.2% from the figure released in the quarter of last year.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Estimate Inc.
Notably, the company’s earnings have beaten Zacks’ consensus estimate over the past four quarters, with an average pace of 16.2%.
Let’s see how things prepare for the upcoming announcement.
Strong demand for iPhone 12 to drive year-over-year sales growth
Apple’s fortunes are heavily dependent on the iPhone, which is by far its biggest contributor to income. The device accounted for 40.9% of net sales in the most recent quarter, where sales fell 20.7% year-over-year to $ 26.44 billion.
Strong demand for the 5G-enabled iPhone 12 is expected to have driven revenue growth in the reportable quarter despite a late delivery. Strong user adoption of the high-end Pro and Pro Max devices should have contributed to the gross margin expansion.
Although Apple is slow to integrate 5G into its flagship iPhone devices, improving the availability of the 5G network in the United States with all major carriers and the rapid rollout of 5G in China should have been growth drivers. major.
Zacks’ consensus estimate for iPhone sales currently stands at $ 59.91 billion, indicating a growth of 7.1% from the figure released last year.
Dynamics of services to stimulate revenue growth
The Services segment has become Apple’s new cash cow, which currently has a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
The growing popularity of the App Store and the growing subscriber base of Apple Music, Apple Podcasts, and arcade games likely benefited Q1 FY2021 revenue.
Apple currently has more than 585 million paying subscribers in its service portfolio. The App Store continues to gain the attention of leading developers around the world, helping the company deliver exciting new apps that generate traffic.
The social distancing standards imposed by the coronavirus are expected to have further boosted App Store sales in the reportable quarter.
Notably, the App Store accounted for 68.4% of total sales, which amounted to $ 276.6 million, up 35.2% year-over-year on Christmas Day 2020, per in relation to Alphabet GOOGL-owned Google Play Store sales were $ 129 million, up 33% year-over-year and accounting for 32% of the total, according to the Sensor Tower report.
Additionally, Apple’s efforts to expand its ecosystem through partnerships with Amazon AMZN and Google are positive for the Services segment.
Apple Music boasts solid content, with over 70 million songs. Plus, the availability of Apple Music on Amazon Echo and Fire TV devices, as well as Google Nest Audio and Nest Mini, helps it expand its presence and compete better. Spotify SPOT and YouTube Music.
Additionally, Apple Pay is expected to have seen an increase in activity as quarantined customers used digital and contactless tools to manage their financial activities. Apple claims that over 90% of stores in the United States, 85% of stores in the United Kingdom, and 99% of stores in Australia accept Apple Pay.
Additionally, Apple rolled out Fitness + subscription services designed for Apple Watch on December 14. Fitness + tracks health and workout data from Apple Watch that users can view on their iPhones, iPads, or Apple TV. This should have further boosted growth in the quarter to be released.
Zacks’ consensus estimate for services currently stands at $ 14.78 billion, indicating 16.2% growth from the figure released a year ago.
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