Handicapping Apple's December 2021 earnings

The Street is low. Thomson Financial is looking for 6.2% revenue growth; the congenitally bullish indies are predicting almost double that.

Click to enlarge.

My take: Last year Apple reported better than 21% revenue growth and the stock got clobbered. Go figure.

We'll find out who was closest to the mark when Apple reports on Thursday after the markets close. I'll be monitoring the earnings call and you can too. Click here just before 5 p.m. Eastern (2 p.m. Pacific).

UPDATE: For those of you commenting below on the market's reaction to Microsoft's earnings, here's a snapshot of the head fake.

29 Comments

  1. John Konopka said:
    Microsoft beat the street and they are down almost 5% after hours. Go figure. Doesn’t bode well for Thursday.

    3
    January 25, 2022
    • Adam Stein said:
      I came here to discuss the same thing. Does anyone understand what “analyst expectations” are anymore? If they expect what they expect and the company beats what they expect, shouldn’t that be the story?

      1
      January 25, 2022
      • Robert Paul Leitao said:
        Adam: Yes and no. In today’s edgy market, shares may not trade rationally in immediate response to news. Depending on overall market conditions, Microsoft is apt to trade higher over the next few months. My view: Buy the fundamentals. Don’t “wager” on the market’s immediate response to results.

        5
        January 25, 2022
    • Robert Paul Leitao said:
      John: In a quick review of the results, Microsoft’s revenue and profit performance were impressive, beating consensus expectations on both the top and bottom lines. Revenue rose 20% in the quarter and eps rose 22% on a YOY basis. However, some investors were disappointed at the pace of growth in some operating segments. Shares can, and at times will, trade divorced from underlying fundamentals especially in today’s edgy market. I agree. Be cautious with expectations on immediate market responses in the current environment.

      5
      January 25, 2022
    • Rick Povich said:
      You beat me to that. AAPL always seems to suffer one way or another after earnings. I’m hoping for the best

      1
      January 25, 2022
  2. Daniel Epstein said:
    Immediate Market reaction to earnings reports are not a good measure of how well or poorly a company has reported its business is doing. Some earnings seasons are sell the news events. Why everyone who is selling on good news seems overdone to me is that there still seems no return somewhere else! Cash was trash last year. Bonds also. In a rising rate environment people are trying to time the market. Might be hard to be calm while this goes on but the aftermarket response is not investment friendly. Still can take a stock a long time to recover from the reaction but it is likely MSFT is a better buy than sell at this point.

    3
    January 25, 2022
    • Robert Paul Leitao said:
      Daniel: I agree. Again, buy the fundamentals. Don’t “wager” on the market’s immediate response to results. Rarely is there a “bad” time to invest in a wide moat enterprise with a solid growth trajectory and a strong balance sheet. Seldom is there a “good time” to wager on market momentum and forego concern for fundamentals. It’s among the reasons the Nasdaq has been getting crushed since the start of the year. Glitter and glamour may entice the unknowing, but the sparkle and shine may not seem so fine when the bills come due as the market works off its stimulus-induced bender.

      3
      January 25, 2022
      • Alan Birnbaum said:
        Benjamin Graham:
        “In the short run, the market is a voting machine but in the long run it is a weighing machine”

        0
        January 25, 2022
  3. Michael Goldfeder said:
    Microsoft is down and IBM is up after they both reported good earnings this week. Which company would you rather own? The market is a strange place at times. Regardless of the initial reaction to reported earnings, IMO the better metric is the FCF number. Apple keeps hitting that out of the ball park and it just fuels increased buybacks.

    I’m still wrapping my mind around the last buyback number approved by the Board in 2021 for $90 billion. What will the number be this year? I’m thinking it will be more when they announce it after the 2Q reporting period. I’m good with that kind of a “beat!”

    1
    January 25, 2022
  4. Daniel Epstein said:
    MSFT seems to be rising during the conference call so too early to draw conclusions on the total market reaction. Initial reaction yes but not the important reaction if it continues to recover.

    0
    January 25, 2022
    • Adam Stein said:
      Well, look at that! Now up 1.2%

      0
      January 25, 2022
  5. Michael Goldfeder said:
    Potato, patato. Cumulus clouds, cirrus clouds, stratus clouds, and cirrostratus clouds. Did any of those drop with their recent earnings report? Or would that just be expected of Nimbus clouds?

    0
    January 25, 2022
  6. Cy Manning said:
    Unfortunately (and I greatly hope I’m wrong), I presume AAPL won’t provide guidance again. That’s never taken well and in the current market the lack of guidance could be particularly punished.

    Regardless, I’ve given up on AAPL earnings pops lately. Seems if earnings are either good, meet or near-miss = sell off. And while a remote possibility, a spectacular earnings beat creates a ‘tough compare’ = sell off. No winning scenario. It also doesn’t seem to matter recently whether AAPL’s run-up or -down pre-earnings.

    I miss Mr. Jobs’ management of WS.

    1
    January 25, 2022
    • Michael Goldfeder said:
      @Cy Manning: The best winning scenario is another huge chunk of FCF being reported. If the market wants to artificially hold down the price of Apple stock, then that means more buybacks at much lower prices. I’m good with that at the moment. Taking shares out of the float is always a positive event. The analysts will say what they want. But note that they never say much at all about the FCF numbers being achieved each and every reporting period.

      3
      January 25, 2022
      • Cy Manning said:
        @Michael Goldfeder Agreed, but my perception is Mr. Cook is not significantly opportunistic with buybacks at such times. Trust me, I’d like nothing more than to see a press release out shortly stating AAPL entered agreements to purchase $10 or $20+ billion in shares.

        Further, these ‘buyback opportunities’ come with volatility. As market cap grows and we’re dependent on ever more investors holding larger portions of their portfolio in AAPL, that risk works against AAPL . . . at least short-term.

        0
        January 25, 2022
  7. Arthur Cheng said:
    We use the word “investor” when we actually are describing “traders”. Most of us here are true investors and will look at the fundamentals and long term prospective, not short term fluctuations, unless looking for specific opportunities to get into a particular stock.

    Traders actually does not care if the stock goes up or down, they can make money both ways. They use the thinly traded after-hours market to case the fluctuations so they can take advantage of the moves.

    Short term I am actually not too worried about which direction AAPL goes after earnings. Slightly longer term (this year) I am watching it more since I will have to sell some from my IRA for my RMD.

    3
    January 25, 2022

Leave a Reply