“Apple Inc. is expected to have finished 2020 with its most profitable quarter ever, fueled by an uptick in higher-end iPhone sales and a pandemic-induced surge in demand for its laptops and tablets,” WSJ writes.
Numbers To Consider:
- Apple’s earnings could bring its first-ever $100 billion in sales quarter.
- Profit is also expected to rise 8% to $24 billion, according to FactSet.
- Analysts on average say Apple’s revenue improved by 12% to $102.8 billion compared to a year ago.
Why It Matters: It’s a massive earnings week, with Tesla and Facebook expected to also post record profits. From a broader standpoint, the outlook of Apple and its tech-giant contemporaries will ultimately determine whether investors think “tech stocks can continue to fuel record growth in the S&P 500.”
Behind Apple’s Success: Investor enthusiasm has been driven by the latest release of the iPhone 12, along with “heightened spending on its products from consumers working, going to school and seeking entertainment while stuck at home.”
- Apple shares rose 81% in 2020 and have grown around 8% so far this year.
What’s Next: Apple’s business is closely tied to the success of the iPhone and investors this week will be “looking for signs the new iPhone has legs.” Analysts project a quarterly sales increase of 30% in Apple’s iPhone segment. It’s a wait-and-see situation, especially with the new iPhone 12 being the first company’s first entry into next-generation 5G technology.
For the first fiscal quarter of 2021, analysts are expecting $AAPL to print $103.3 billion in revenue, $32.3 billion in EBITDA. I am mostly interested in how much of an iPhone 12 boost the company is seeing and commentary on future growth avenues.