Can Apple Inc. Sustain Earnings in Early 2015?

As Apple Inc. (NASDAQ:AAPL) draws near to releasing its quarterly earnings report for the first quarter of 2015, investors wonder whether the company estimates are as big as speculators are hoping they would be, or just big enough to save the company from any criticism by the investors. And, will the company be able to sustain the value of earnings in the coming quarters?

Apple Inc. reported estimates of sales to fall in between the $63.5-$66.5 billion range, a value almost 15% higher than the one reported for the first quarter of the previous year. However, analysts are of the opinion that sales figures for the company would be approx. $68.3 billion for the first quarter of 2015, which would be a figure up by 21% compared to last year’s figure.

According to analysts, Apple Inc. had a pretty good fourth quarter in 2014 as far as sales figures are concerned. The company had impressive sales of its latest iPhone 6 Plus, which has quickly become the most sought-after smartphone of 2015 as of now. Hence, analysts have pegged the per share earnings for the first quarter to be around $2.59, up by 25% compared to last year’s value.


If results of the first quarter fell in line with analyst estimates then Apple Inc. would experience the best quarter in 11 quarters. Sales growth for the company would also be the best the company has experienced in the past 8 quarters.

However, does this mean that the quarter has been big for Apple Inc.?

According to reports, the company has undermined sales forecast for this quarter; the company is also having demand and supply issues with its iPhone 6 Plus. This will seriously hamper sales for the company in the March quarter, as supply will not meet demand and, hence, revenue figures for the company will be below those forecasted for the March quarter of 2015.

It is being expected by analysts that the quarter of March will witness earnings per share of $2, which would be up by 20% compared to last year’s March quarterly figures, and sales of $53.71 billion, which would be up by 18% compared to last year’s March quarterly figures.

However, with the bottleneck on production, Apple shares may not perform well in the upcoming quarter due to sustained (not improving) profitability. Hence, according to investors, shares for Apple Inc. are not the best ones to invest in right now, as returns cannot be expected for at least a quarter longer. In the next quarter, Apple will launch its Apple Watch, which is expected to boost Apple Inc. sales and, hence, increase the value of its stock. Also, in the next quarter, Apple will increase production of the iPhone 6 and will catch up with the shortage in the market.

For the time being, Apple Inc. (NASDAQ:AAPL) shares at a hold according to analysts. However, they are a buy after the March quarter is done and dusted.