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Apple Q4 Earnings Preview: What to Expect

Apple (AAPL) is scheduled to report fiscal fourth-quarter 2021 earnings on October 28, after the market closes.

Over the past year, shares of the company have jumped almost 29%, and are now trading at over $148. Solid Q4 results might propel the stock price upward, so let’s take a closer look at what analysts on the Street are expecting.

Analysts, on average, expect Apple to post adjusted earnings of $1.24 per share and revenues of $84.79 billion for fiscal Q4.

Meanwhile, the Earnings Whisper number, or the Street’s unofficial view on earnings, stands at $1.35 per share. (See AAPL Dividend Date and History on TipRanks)

Prior Quarter Snapshot

Apple’s fiscal third-quarter financial results were outstanding, thanks to robust Services revenue and record iPhone sales.

Revenues increased by 36% to $81.4 billion, much above analysts’ projections of $72.93 billion.

Meanwhile, adjusted earnings of $1.30 per share doubled on a year-over-year basis and also came in above Street expectations of $0.82 per share.

See Analysts’ Top Stocks on TipRanks >>

Factors to Note about Apple

Apple is one corporation that has continued to expand its product range and develop a pipeline of new innovations. It is fair to argue that once people begin using an Apple device, it is tough for them to leave the company’s ecosystem.

Apple has a slew of updated items on the way, but iPhones still account for the majority of the company’s sales figures. The iPhone accounted for $39.6 billion of Apple’s quarterly revenue in fiscal Q3, up 50% year-over-year.

The much-anticipated iPhone 13 was recently unveiled by the business. The new release, as well as the redesigned iPad and Mac gadgets, could improve sales in the upcoming quarter.

Growth in Apple’s Services business is another important catalyst for the company in the approaching quarter. Services revenue was $17.5 billion in fiscal Q3. It hit a new all-time high and increased by 32.6% year-over-year.

The firm continues to make smart acquisitions to expand its Services offerings. Apple’s Services business should continue to grow, resulting in more recurring revenues, higher margins, and, as a result, higher profits.

On the flip side, Apple, like other corporations, is not immune to the worldwide chip scarcity caused by COVID. As a result, Apple could slash its iPhone 13 production projection for 2021 by up to 10 million units. This could, to some extent, impact the company’s top-line growth in the near term.

However, Apple’s loyal client base and solid operational execution should prevent iPhone’s demand from waning considerably.

Investors should be aware that Apple did not issue official revenue estimates for Q4 due to the pandemic-induced uncertainty. Management, on the other hand, did state that it expects double-digit revenue growth year-over-year, but that the rate of increase would be slower sequentially. Foreign exchange headwinds and prolonged supply restrictions are projected to be the reasons for the slow revenue growth.

We should be patient and wait for the earnings results because, despite significant supply chain issues, Apple has the strength to surprise both itself and investors.

Analyst Recommendations on Apple

Ahead of the fiscal Q4 earnings announcement, Credit Suisse analyst Matthew Cabral maintained a Hold rating on the stock and a price target of $150.00.

Cabral anticipates Apple’s demand to be stable, given the iOS ecosystem’s overall stickiness, but he prefers to remain on the sidelines. Among his concerns is supply-chain interruptions.

On TipRanks, Apple stock commands a Strong Buy consensus rating, based on 20 Buys and 6 Holds.

As for price targets, the average AAPL price target of $170.09 implies 14.4% upside potential from the current levels.

Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article​.

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