Yahoo Finance What the market expects from Apple and Amazon
APPLE
With plenty of market anticipation, Apple Inc (AAPL) will report its 2015 third fiscal quarter results on Tuesday after the closing bell. Estimize and Wall Street are assuming lower earnings per share (EPS) and revenue numbers versus the previous quarter. Apple continues to be a market darling with a year-to-date (YTD) capital return of 19.28% compared to the Nasdaq Composite index which has managed to rise 9.99%. Estimize currently have over 400 estimates for Apple, and is expecting EPS to be $1.86 and revenues to come in at $49.476 billion. Wall Street, to no surprise, is predicting lower figures than Estimize and forecasts EPS of $1.79 and revenues of $49.092 billion.
Investors will be eager to hear more information regarding the company’s expansion into China. The opportunity for Apple to increase its revenues through expansion in China is significant, but does not come without risk and investors are aware of this. Domestic threats, such as OnePlus and Xiaomi, are potential competitors that may limit Apple’s ability to continue to accumulate market share. Further, with the current stock market plunge occurring in China and falling consumer confidence, spending on luxury items such as iPhones may feel the pinch in China until all is resolved.
Finally, this report will be the first opportunity for investors to get a reading on Apple Watch sales. The long awaited Apple Watch is expected to be a driver of growth for Apple moving forward and therefore the success of this product is essential to Apple. Management are relying on the Apple Watch to further diversify the company’s revenue streams as the iPhone segment currently makes up 70% of sales, and bolster the company’s position in smart wearables device market.
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Amazon
Amazon (AMZN) is also set to report its second-quarter results after the closing bell Thursday. The Estimize community currently has 69 estimates and is calling for an EPS number of -$0.06 versus Wall Street, which predicts -$0.13. Estimize also forecasts higher revenues of $22.465 billion relative to Wall Street’s $22.278 billion consensus.
Amazon has continued to deliver solid revenue growth numbers as the online retailer continues to steal market share from the likes of Walmart (WMT), Best Buy (BBY), etc. Amazon recently held its “Prime Day,” held for Amazon Prime members and topped expectations. Although the sales figures from Prime Day are not recorded in tomorrow’s release, the strong result is helping move Amazon’s share price higher.
Despite all the positive fundamentals associated with Amazon at present, investors will want to hear more guidance on the companies spending plans moving forward. Amazon has a track record of poor investment purchases including the well-publicized flop that was the Amazon Fire Phone. These decisions have resulted in Amazon recording EPS declines for three of the past four quarters (with the exception of the holiday quarter).
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