Seems that all this talk about apples earnings only being positive make you just want to go out and buy all the call options you can possibly buy, seems like you just want to max out all credit cards and buy as many shares as you can around the $427 area because it seems this stock is going to jump probably 10%+ after hours tomorrow on earnings according to the figures they have posted in this article. Says that apple usually has a 70% chance of going higher after they report earnings. Everyone should know however apple loves to under promise and over deliver, they have known to do that constantly over the years. Apple is looking for $9.30 EPS and $37 Billion in Revenue. Analysts are have the numbers at over $10.00 in EPS and over $38 Billion in Revenue. Its obvious apple will do over $10.00 in EPS and probably closer to $39 billion in Revenue. They sold millions of the 4s the first weekend it came out, so if that trend continued into the holiday season apple probably sold around 25-30 million iphones. January 23, 2012, 2:34 PM Apple Earnings Preview: Analysts Expect Another Record-Smashing Quarter By Steven Russolillo Apple is scheduled to report its quarterly report after tomorrowââ¬â¢s closing bell. After last quarterââ¬â¢s disappointment, the company is expected to notch another blowout performance. Appleââ¬â¢s earnings last quarter fell short of analystsââ¬â¢ expectations for the first time since 2004, according to Birinyi Associates. The Street wasnââ¬â¢t so kind, as Apple shares that day notched their biggest one-day dollar decline ever, sending the stock below $400. Since that report, shares have recovered about 7% and last week hit another record high. The big takeaway for this upcoming report will be iPhone sales. Appleââ¬â¢s expected to release sales of its latest hit, the iPhone 4S. The company originally boasted it sold 4 million of the new iPhones during its first weekend of sales back in October, but it has yet to update that figure again. Pacific Crest Securities estimates the company sold 29 million iPhones last quarter. IPad sales will also be a key segment to watch. From Pacific Crest: The anticipated launch of a new iPad in FQ2 is likely to slow demand for iPad 2 in the coming weeks. Depending on the timing of the launch, Apple may not be able to sell enough new iPads to offset decreased demand for iPad 2, which could drive soft guidance and a reduction to Street iPad estimates. Wall Street currently expects Apple to report first-quarter earnings of $10.08 a share on revenue of about $38.8 billion. Those projections are ahead of the quarterly guidance Apple gave during its last report, when it was forecasting EPS of $9.30 on revenue of about $37 billion. For some historical perspective, traders typically react positively to Appleââ¬â¢s report. About 70% of the time, the stock has risen in after-hours trading following Appleââ¬â¢s earnings release, according to Birinyi. Shares average about a 2.4% gain in late trading. Apple shares were recently up 1.5% at $426.61.
I've avoided playing any earnings but I'm thinking about a 1 contract atm or ntm credit spread with apple this afternoon that would expire otm with the weekly on Friday. Looks like call volume is much higher than puts indicating more trader interest. Likewise call premiums seem better than the puts indicating market makers supporting the traders. Also the stock price has dropped $7 in the last week and is trading flat today indicating more bearish than bullish. All of which suggests to me that most people are playing a drop after earnings. Decisions, decisions.
I would say apple has a good $25-$30 move in either direction tonight....last quarter they missed, but the reason being is many held out on the 4s, now that the 4s was released it seems this quarter going into the holiday season should have given a huge boost to iphone sales in this latest quarter. Now the ipad did probably sell many units, but with the kindle and nook powering ahead in the last quarter of 2011 it probably took some of the sales of ipad away from apple, not a lot but I would say somewhere between 500,000 to a million units. Found this in an article: The magic numbers will be 31 and 13. If Apple sold more than 31 million iPhones and 13 million iPads, Apple will have met expectations (sky-high for iPhone and lukewarm for iPad). Whisper numbers (the numbers that analysts secretly discuss) probably stand somewhere near 34 million iPhones and 15 million iPads, but missing whisper numbers usually wonât lead to negative EPS estimate revisions. http://www.businessinsider.com/apple-1q12-preview-tale-of-two-products-2012-1#ixzz1kP4iY72B
37 million iphones sold 15 million ipads... $13.87 EPS vs $10.14... I have no clue how analysts can be $3.00 off on earnings. Again apple is very conservative with estimates which makes earnings that much better.
Somehow I don't think the Chinese workers at Foxconn are celebrating the great earnings. Here is John Stewart's video on Foxconn...pretty funny: http://www.thedailyshow.com/watch/mon-january-16-2012/fear-factory (you gotta forward to 1:50 into the video).