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Apple Earnings: World’s Largest Company Set To Report Best Second Quarter Ever—Here’s What To Expect

Topline

Apple, the world’s most valuable company, is slated to post second-quarter earnings Tuesday after the market’s closing bell, and as with other big-tech companies reporting this week, analysts believe the firm will post one of its strongest quarters ever, fueled by strong iPhone sales and continued market share dominance—here’s what to expect. 

Key Facts

On average, analysts expect the Cupertino, Calif.-based tech giant will report revenue of $73 billion for the second quarter, 22% higher than the nearly $60 billion it posted one year ago and its strongest second-quarter showing ever.

Net income, meanwhile, is expected to hit $1 per share, or roughly $7 billion, soaring 54% from last year.

Bank of America analysts said they expect Apple to have sold 46 million iPhones in the quarter, 18% higher than sales one year ago despite a global semiconductor shortage contributing to supply-chain constraints.

As of 3 p.m. ET, Apple shares are down 1.1% Tuesday and up 14% for the year, slightly lower than the tech-heavy Nasdaq’s 15% increase.

What To Watch For

Apple’s earnings call is slated for 5 p.m. EDT. Tom Forte, a senior research analyst at D.A. Davidson, says he’s watching out for any comments from management about growing government scrutiny toward big tech. “We believe government action—via antitrust, executive order, and legislation—represents the single greatest risk for shares of Apple,” Forte said in a recent note. In particular, he worries antitrust regulation may threaten the company’s app store dominance compared to competition from Samsung and Google, among others. 

Crucial Quote 

“While a global chip shortage was an overhang for Apple during the quarter, we believe strength in its iPhone and services businesses neutralized any short-term weakness that Wall Street was anticipating three months ago,” Wedbush analyst Dan Ives wrote in a pre-earnings note, pointing to an uptick in demand out of China as reasons Apple could beat analyst expectations.

Big Number

$159. That’s how high analysts think Apple shares can go over the next year, according to Bloomberg data, giving the stock about 8% upside to current prices of about $306.

Key Background

Founded in 1976 as a manufacturer of personal computers, Apple shares have skyrocketed nearly 500% over the past five years and 55% in the past year amid massive growth in iPhone sales, which account for about 53% of the firm’s total revenue. The company pulled in nearly $275 billion in sales last year and now sports a market capitalization of nearly $2.5 trillion.

Further Reading

Earnings Preview: What To Expect From Apple  (Forbes)

How Will Apple Stock Trend Following Q3 Earnings? (Forbes)

Earnings Palooza: Week Includes More Than One-Third Of S&P 500 Earnings, Fed Meeting (Forbes)

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