Wednesday, July 18, 2012

Apple Inc.(NASDAQ:AAPL) – How To Trade Pre-Earnings?

Shares of Apple Inc.(NASDAQ:AAPL) have been doing fine before its third quarter earnings to be announced on July 24, 2012. The stock has traded in a narrow range ever since it reported its second quarter earnings on April 24. The company had reported well above analysts’ estimates and the stock gained over 9% following earnings to $610.

The stock then fell to $530m, but quickly rebounded to $580 in few weeks and went into consolidation phase. Early July, the stock gained momentum and comfortably broke above $600 mark. The stock is now trading lower by 0.12% to $606.19.

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Average analysts are estimating the company to report $10.38 a share, compared to a year ago profit of $7.79 a share. Revenue is estimated to grow by 30.70% year over year to $37.33.

Although investors are quite optimistic on the company’s earnings as it has done historically, this morning analyst at Pacific Crest issued a cautious notes on upcoming earnings and warned that the company may failed to meet analysts’ estimates. Moreover, the firm also said that fourth-quarter estimates "appear too high."

Despite the warning, the firm expects "extremely strong expectations" for the upcoming iPhone 5 will likely blow away any concerns.

If that’s not enough, on Tuesday, analyst at Gabelli trimmed its shipments for Apple devices across the board, citing worse-than-expected macro weakness. Additionally, last week, analyst at Citi removed the stock from their”Champions" list.

1 comment:

  1. Well that wasn't very helpful, was it.
    Actually, there is a lot of pessimism on AAPL, which in the past has proved to be a valuable contrary indicator.
    I am long and staying the course.


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