Apple Inc., Facebook Inc Report Earnings This Week

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Apple Inc., Facebook Inc Report Earnings This Week

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.

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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.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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  1. Only reason they are saying that what AAPL reports will be overlooked is because they all guessed wrong.
    Focusing on future products and rumors are not the way to invest. Wait til there are product announcements for reaction. Not speculation of what others have failed at already. (Phablets & watches)
    Proof of AAPL’s success using what “they” feel the AAPL customer wants; contrary to the latest TV commercials; the 5S is outselling the Galaxy S5 by boatloads. Good thing; as Samsung can use the boats to take all those Galaxy’s back to Korea.
    Analysts will use any diversionary tactic they can today to save face and keep rumors alive.

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