What Q2 Earnings Could Mean For Apple Stock, Here Are 3 Key Takeaways

What Q2 Earnings Could Mean For Apple Stock, Here Are 3 Key Takeaways ...

The earnings season for Apple has ended. The company delivered another of its trademark income and EPS outperforms. However, Apple''s (AAPL) - Get Apple Inc. Reporthas taken a hit due to:

Apple Maven examines the results in more detail and comes up with a few conclusions about what earnings day might be for Apple and its stocks.

Key Takeaways from Figure 1:3 What Q2 Earnings Could Mean For Apple Stock

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Apple Maven: Investors'' Live Blog About Fiscal Q2 Earnings

AAPL earnings: a quick recap

First, it helps to analyze headline figures briefly. Apple''s $97.3 billion top-line earnings surpassed consensus by more than $3 billion. The 9% increase rate was impressive, considering a 54% increase in the same quarter last year.

EPS of $1.52 was a pleasure surprise that beat average estimates by nine cents. Revenue numbers were instrumental in raising earnings, as did margins that grew once more in the most recent period.

Takeaway #1: iPhone is on fire

iPhone revenues increased by 5%, ducing myself more aggressive. However, it is unbelievably obvious that Apple''s smartphone division has excellent performance.

I have a conviction. Apple did not have its first 5G-equipped device until late 2020, roughly 18 months after Samsung voted the Galaxy S10 5G. This reason, iPhone users kept an eye on their older devices in anticipation of the increase. It reveals the shocking iPhone revenue growth patterns that are expected to decrease by -10% each quarter in 2019.

iPhone revenue growth has increased since Fiscal 19.

Data from company reports from DM Martins Research

The iPhone 13 was the first 5G model to be released without delays in the holiday period last year, which helped boost sales in the most recent quarter.

Takeaway #2: a bump in the road

Investors should now turn the page. Q2 might have been considered a good performance for the Cupertino business, but Q3 might be a different story. This is not my opinion, but CEO Tim Cooks and his executive teams.

According to guidance, revenues in the coming quarter may reach $8 billion. At this high end of the guidance range, we are talking about a nearly 10% fall to the top line due to component shortages and COVID-related plant closures in Asia.

Not only that, but Apple anticipates the gross margin to reach 43% at best, resulting in a decline in profitability for the first time in the last 12 quarters.

The key is that these difficulties may be temporary. Apple''s CEO has stated that nearly all assembly lines are up and running again. At least a small percentage of their lost earnings in the quarter three might be recaptured in future periods.

Takeaway #3: AAPL stock under pressure

The question whether Apple''s April earnings season will be considered a success is up to interpretation. Apple stock has taken a beating following the print, with shares valued at $164 before the earnings release, and are now worth $158 13% below all-time highs.

The firm''s business goals may have a lot to do with the generally bearish tone, particularly with macroeconomic and broad market concerns.

Talks of economic growth deceleration at best, if not a global recession, have increased more recently. Worst yet, economic activity may slow even when the US Central Bank prepares to hike interest rates aggressively.

Given a mix of company-specific news and a sluggish macroeconomic trend, holding Apple stock might be risky in the long run. Long-term investors should keep an eye on price action, as a potential slide in the AAPL price might imply a buy-the-dip.

Ask Twitter

Understanding that all factors below may be linked in some way: which of the following worries you most about Apple stock today?

This is not investment advice, according to attorneys. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Apple Maven

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