Apple Inc. (NASDAQ:AAPL) announced today that its second quarter earnings report for 2014 will be issued on April 23rd. The conference call giving the earnings details will occur at 5 P.M. sharp on the day, eastern time (2 P.M. Pacific time). A streaming audio version of the data will be made available on the company website, and will undoubtedly draw the notice of numerous investors and market watchers.
Apple’s first quarter earnings report offered guidance of $42 billion to $44 billion for Q2 2014. The Cupertino tech giant is clearly erring on the safe side with this prediction, since Q2 2013 witnessed $43.6 billion income, and the guidance predicts essentially zero revenue growth compared to last year. For comparison, it is interesting to note that Apple Inc.’s (AAPL) profits in Q1 2013, $54.5 billion, was less than the Q1 2014 profits it reported, a record $57.6 billion.
If the same rise holds true from year to year for the second quarter, despite Apple’s (AAPL) “conservative to the point of pessimism” guidance, then second quarter earnings could edge above $46 billion, $2 billion or more higher than the company’s projections. Of course, even this might be too little to please Apple’s finicky investors, who sent the stock price plummeting for several days following the Q1 earnings report because its record-setting gains were not big enough.
The iPhone’s recent penetration into the huge Chinese market might be enough on its own to provide an upward nudge to second quarter profits. Figures indicate that iPhone sales may be up by several million units in the second quarter of 2014. Sales in China represent only a small portion of an overall trend of continuing success. If the forecasts are accurate, the iPhone could potentially raise Q2 profits above the $46 billion posited here.
Even if Apple Inc.’s (AAPL) profits are higher than expected, however, investor reaction is less certain. Investors seem to be rather disgruntled, and even petulant at times, over the tech enterprise’s focus on solid profits and eschewing of flashy market share figures in terms of total units shipped. The record-breaking profits of 2014’s first quarter triggered a sell-off of stocks because the figures were only excellent rather than overwhelming. A similar rise in profits for Q2 could just as easily trigger a slide in prices as it could bump them upwards.
Nevertheless, it can also be argued that with its robust capitalization and high profit margins, Apple does not need feverishly zealous investors driving its share prices astronomically high. A more staid crowd of investors who are content to leave the stock somewhat undervalued may be precisely the firm, stable base that the maverick company needs to build fresh successes on.
