What Are Markets Expecting From Fast Approaching Apple Earnings?

As market watchers and investors brace for tech giant Apple's (NASDAQ: AAPL) upcoming earnings release, the spotlight intensifies on the expected numbers that will reflect the company's performance.

Scheduled for release after the market closes on Thursday, August 1st, markets have almost come to expect ‘beats' from AAPL, as the last year delivered EPS and revenue beats each time.

Analysts have set their expectations, predicting Apple to post earnings of $1.33 per share for the quarter, with anticipated revenue hitting a significant $84.12 billion.

These projections are particularly noteworthy as they follow Apple's previous earnings report, where the company achieved $1.53 per share (outpacing the consensus estimate by two cents) against revenue of $90.75bn. With a broader market pullback taking effect in yesterday's session, and a rotation out of mega caps into small caps potentially underway, how much of a beat will markets want to see in order to maintain the current stock price, or increase?

Financial health is strong at Apple, and the commanding return on equity of 148.33%, which is an indicator of the company's efficiency at generating profits from its shareholders' investments. The RoE at the firm has consistently been above 140% over the past 3 years. Alongside this, Apple maintains a net margin of 26.31%, showcasing its ability to translate sales into actual profit—a key measure of operational effectiveness.

In a move reflecting confidence in its financial situation and a commitment to returning value to shareholders, Apple's board recently green-lighted an ambitious stock buyback program. This initiative authorises the repurchase of up to $110.00 billion in outstanding shares, a decision that often bodes well for stock prices.

Moreover, Apple announced an uptick in its quarterly dividend to $0.25 per share. This adjustment brings the annualized dividend to $1.00 and represents a yield of 0.46%. Dividend increases are generally seen positively by investors as they can signal a healthy cash flow and solid growth prospects.

Apple's comprehensive reach in the global market is backed by its vast array of products including smartphones, personal computers, tablets, wearables, and accessories. Its next earnings report may influence perceptions of its current standing and future direction, serving as a critical barometer for both the company and its stakeholders. As the fiscal quarter's end approaches, all eyes will be on Apple as it unveils figures that could shift market sentiments.