Apple Inc. (NASDAQ: AAPL) has confirmed that it will release its Q4 2021 earnings results on October 28, 2021, after market close
What to look for
The company is likely to beat estimates across the board in its Q4 earnings report, but supply chain disruption could result in iPhone shortages during the holiday quarter. Despite the ongoing concerns regarding chip shortages, the company is likely to top estimates across all product categories. However, supply constraints will be a major concern for investors considering the company recently indicated that it will cut the iPhone 13 series production by around 5 million units due to chip shortages.
Earnings: Stockearning’s Estimated EPS for Q4 2021 is $1.23 per share. Historical EPS Performance for the past 12 quarters shows that the company has beat estimates 12 times (100%) and missed zero times (0%). In Q3, the company reported diluted earnings per share of $1.3.
Revenue: The company is expected to report Q4 revenue of $84.8 billion driven by iPhone 12 sales, with iPhone 13 sales likely to have an impact on Q1 2022 earnings. JPMorgan estimates iPhones sales to account for around $46 billion of sales for the quarter. In Q3 2021, the company reported revenue of $81.4 billion, a 36% YoY increase.
Stock movement: Since the last earnings release, AAPL stock has gained 1.7%. The share price has been UP 25 times over the previous 47 quarters following the earnings release. So, the historical price reaction suggests a 53% chance of the share price going UP after the company releases earnings. According to the Stockearning algorithm, the predicted stock move on the first day is 4%, while the predicted move on the seventh day is 5%.
What analysts are saying
JPMorgan analysts Samik Chatterjee expects the company to beat Q4 2021 earnings estimates thanks to robust demand in Macs, iPhone 12 series, and Services. But the analysts are anticipating the focus of investors to be on guidance for Q1 2022 owing to then-recent supply chain disruption concerns. As a result, Chatterjee believes that the company’s Q1 guidance will “feel like deja-vu from last earnings call with a beat accompanied by guidance for lower than typical seasonality," which will be driven by supply disruptions. However, the analyst believes that the solid demand for the 5G iPhone SE and iPhone 13 compared to low investor expectations will be a catalyst for the stock. As a result, he maintains a "Buy" rating on Apple shares with a price target of $180.
DA Davidson analyst Tom Forte raised his target price on AAPL from $167 to $175 and maintained a "Buy" rating in the stock. In a research note, the analyst told investors that Apple products benefited from the pandemic as consumers purchased more tablets and laptops as they were forced to work remotely.
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