Barron’s Eric Savitz: ‘Apple could blow the top off earnings — again’

From Savitz’ fiscal Q2 2021 earnings walk-up, posted Tuesday morning on Barrons.com (via Apple Stocks):

Apple has its work cut out for it trying to surpass 2020’s blowout results. The thing is, the tech giant just might be able to pull it off.

The buzz around Apple last year was off the charts, even for what is the buzziest of technology companies… The pieces all came together in the December quarter, when Apple posted its biggest quarter ever. Sales soared 21% to $111.4 billion, more than $8 billion over the Street consensus. Every product category—iPhone, iPad, Macs, wearables, and services—notched double-digit growth. Apple stock finished the year up 81%, adding nearly $1 trillion to its market cap.

That’s a tough act to follow, particularly with the March quarter, which always slows from the holiday-boosted December quarter. But Apple could pull off the quintuple double again when its results come out after the bell Wednesday. The Street certainly thinks so, even if the market, which has pushed Apple shares up less than 2% in 2021, has been more cautious. Consensus estimates call for double-digit increases from last year across the board: iPhones sales up 43%, to $41.4 billion; iPad sales up 29%, to $5.6 billion; Mac sales of $6.8 billion, up 27%; wearables sales (mostly Apple Watch and AirPods) of $7.4 billion, up 18%; and a 16% bump in services, to $15.5 billion.

Overall, the Street consensus expects sales of $77 billion, up 32% from a year ago, with profits of 98 cents a share. That would be the fastest top-line growth rate for any Apple quarter since March 2012, when revenues were about half what they are now. And most bullish Apple analysts seem to think their own estimates are too low—a print at $77 billion would likely trigger a selloff in the stock.

My take: I’m delighted that Erik will be our guest Saturday for this month’s post-earnings Apple 3.0 ask-me-anything (12:30 p.m. Pacific, 3:30 Eastern). There are a still a few seats left on the subscriber-only Zoom call. If you want one, drop me a note at ped@ped30.com with Savitz in the subject line.

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See also: Apple 3.0 exclusive: Zoom with Barron’s Eric Savitz

13 Comments

  1. Gregg Thurman said:
    Apple has its work cut out for it trying to surpass 2020’s blowout results. The thing is, the tech giant just might be able to pull it off.

    My revenue/earnings estimate is based on three things: 10 year average Q1 to Q2 decline adjusted for iPhone launch delay and work from impact on Mac and iPad sales.

    REV $82.625 Billion
    EPS $1.10

    That’s just 6.5% higher than current WS consensus.

    Apple beat WS’s December quarter consensus by 7.8%.

    Now past isn’t necessarily prologue, it is a strong indicator.

    5
    April 27, 2021
  2. Adam Stein said:
    “ most bullish Apple analysts seem to think their own estimates are too low”

    Does this sentence make sense to anyone? If the analysts think there estimates are too low, then their estimates aren’t really their estimates.

    0
    April 27, 2021
  3. Troy Thoman said:
    GOOG certainly blew the top off, hope that means the same for AAPL.

    4
    April 27, 2021
  4. Jerry Doyle said:
    Results from the Q2 earnings call are important, but I fear unless we hear a commensurate level of positive news on forward guidance from Tim and Luca that we could see a sell-off in the stock with many investors taking profits.

    5
    April 27, 2021
  5. bas flik said:
    compared to msft i do not know. aapl is behind in multiple.

    5
    April 27, 2021
  6. Paul Brindze said:
    Looks to me like there has been a lot of short selling in the last week or two. Every time the shares went close to or just over 135, selling beat it back.

    I think a lot of this is based on the same thinking Jerry Doyle is concerned about … a great quarterly report with no guidance, resulting in down price after earnings.

    Those selling may be correct, but, if not , we might see a nice short squeeze, that could take us back to or past all time highs. That would be nice. 🙂

    8
    April 27, 2021
  7. Kirk DeBernardi said:
    I remember Tim Cook saying, on more than one occasion, than he’d rather not report anything quarterly because it misrepresents the full story of Apple’s long-view business, like a concerto played note by note, minute by minute.

    Quarterly forecasting is a different version of the same beast — and an excitable, jumpy beast at that.

    6
    April 27, 2021

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