US tech earnings: Apple

Apple (AAPL) are reporting on Wednesday, 3 May at 6.30am AEST.

Market data
Source: Bloomberg

Current last traded price $143.90.

This will probably be the most widely watched result coming from the US quarterly reporting season underway. Last year Apple reported a decline in revenue from 2015 to 2016, with last total revenue reported at $215.64 billion.

Currently, the Bloomberg average from 37 analysts show 2017 first quarter revenue estimates are expected to come in at $53.02bn, with an estimated total of $233bn for 2017 a rise of $15.6bn from 2016 representing growth of circa 7%. Guidance for the June quarter is expected around $45bn.

Earnings per share expected at $2.02 for the quarter, this will be the catalyst for a move higher in the share price.

As a guide, Apple has a good history of providing an earnings surprise over estimates. At the same time, the underlying share price has bumped higher by an average of 1.5%.

On current pricing of 143.80, this is an immediate move of $2.14 from these levels. Since 2015, there has been a decline into the lows of $90, which is in line with revenue declines during that period. The current price recovery has put the stock back into a primary uptrend.

As the breakout above $135 looks to be consolidating above $140, a surprise in revenue this quarter could extend the price to $155.00. A stop loss would be established at a breakdown below the $140 level.

Late last week some of the largest names in the technology laden NASDAQ reported earnings.
In summary, some very strong numbers came through on revenue growth and earnings per share (EPS).  Alphabet, the public holding company for Google, showed revenue rising 20% from the same period last year with the corresponding rise in share price of 23.5% year on year.

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