The earnings of Apple Inc. (NASDAQ:AAPL) seem to be watched more closely than those of most other companies, even though the Cupertino tech firm’s stocks are highly undervalued according to most analysts. Any deviation from the expected earnings – even if the overall financial health of the company remains good – is sufficient to trigger a negative reaction from the stock market. 2014’s first quarter (Q1) results did not match expectations, leading to a fall in share price and turmoil among investors. Today, Apple’s Q2 results will be posted at 4:30 PM EST, or 1:30 PM Pacific time.
Bloomberg is setting the tone for investor expectations with today’s video report, which expects Apple (AAPL) to post revenues of $43.6 billion for the quarter. This is precisely the same amount that Apple reported as its revenues for Q2 2013, though the analysis firm is expecting slightly higher sales volume for all of Apple’s main product lines.
For instance, it is predicting that 37.7 million iPhones sold during the three-month period, which represents a hair-thin increase of 300,000 individual units compared to last year. iPad sales are expected to notch upwards by a mere 200,000 units, while Mac sales are predicted to rise by a mere 30,000. Despite the notable, broadly based improvements across the American economy, arising in part due to President Barack Obama’s economic initiatives, demand is clearly expected to remain weak in a global marketplace nearing saturation level for personal electronics.
Despite its undoubted strengths, Apple Inc. is unlikely to pull too remarkable a rabbit out of its hat to upset Bloomberg expectations. The second quarter of the year is not exactly a “hot” selling time, though it is perhaps superior to the first with its post-Christmas slump. Furthermore, Apple has not done anything particularly extraordinary thus far this year. No new products have been announced or released. The large scale production of sapphire in Mesa, Arizona is tantalizing, but thus far has born no visible fruit.
Similarly, however, investors are unlikely to be expecting wondrous things from Apple’s bottom line, either. As long as the company remains on track and continues to sell items solidly, it seems likely that investors will not overreact to relatively tepid revenue news. The third and fourth quarters of the year will be watched much more closely, given that the iPhone 6, the much-rumored iWatch, and perhaps even a surprise product release are all expected closer to the end of the year.
