Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) are just two of the big technology companies that will be releasing their latest earnings report this week. Analysts expect both companies to post year over year gains.
Apple could surprise
Wall Street expects Apple’s earnings to rise 13% to $1.23 per share. Analysts are expecting revenue to be $37.93 billion, a 7% year over year increase. In the last quarter, Apple surprised to the positive, and its stock has increased by about 26% since that report. Investors were pleasantly surprised with the company’s iPhone sales, and analysts expect nothing less this time around, even though the June quarter has historically been weak for iPhone sales. In that quarter, Apple shipped 43.7 million smartphones, a 17% increase that beat Wall Street estimates of 37.7 million.
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Investor sentiment on Apple has risen along with analyst sentiment on the company. According to Business Insider, the Bloomberg terminal shows that 46 analysts who follow Apple have a Buy rating, while 13 have a Hold rating. Just four of them have a Sell rating on Apple. Recently Citigroup upgraded Apple to Buy, while JPMorgan upgraded it to Outperform this morning. Analysts from other firms have also increased their price targets.
Several analysts have suggested that whatever Apple reports this time around won’t matter much because investors are excited about upcoming products like the iPhone 6 and the rumored iWatch.
Facebook expected to gain big-time
Wall Street is predicting that Facebook will post earnings per share of 32 cents, which is a 40% year over year increase. The social network’s revenue is expected to increase almost 55% to $2.81 billion.
Most analysts expect mobile ad revenue to continue being an important part of Facebook’s results. Trefis analysts believe mobile could contribute up to 65% of Facebook’s revenue. In addition to mobile ad revenue, they will be watching the social network’s international performance.
They also believe Facebook will show both year over year and sequential growth in pricing for its ads. The company has been focusing on targeting and optimization for its ads, aiming to improve the return on investment for its ads, thus being able to gather a higher cost per click. During the first quarter, the social network posted an 82% increase in ad revenue, which was mostly driven by a 118% increase in average pricing for ads, according to the Trefis team.