Amazon & Apple Earnings: What to Expect
Earnings season continues to chug along, with the period kicking into a much higher gear this week. So far, the Q2 cycle has been positive, helping reassure investors and boosting overall sentiment within the market.
And this week, we have many notable companies slated to report, including Amazon AMZN and Apple AAPL. Both companies will report after the market’s close on Thursday, August 3rd. Both stocks have staged big rebounds year-to-date, outperforming the general market handily.
But how do expectations stack up heading into their respective releases? Let’s take a closer look.
Amazon
Analysts have kept their earnings expectations muted for the quarter to be reported over the last several months, with the $0.34 per share estimate unchanged. The market heavyweight is expected to see a solid recovery, with the value reflecting a 240% improvement in earnings from the year-ago quarter.
Image Source: Zacks Investment Research
Amazon’s top line is also forecasted to see growth; the Zacks Consensus Sales Estimate for the release presently stands at $131.5 billion, 8.5% higher year-over-year. It’s worth noting that the quarterly estimate is up a fractional 0.3% since the end of May.
Investors will wisely monitor Amazon Web Services (AWS) results. The Zacks Consensus Estimate for AWS net sales stands at $21.5 billion, indicating a 9% improvement from year-ago sales of $19.7 billion and reflecting a slight slowdown relative to prior year-over-year growth rates.
The company exceeded the consensus expectation for AWS net sales in its latest release, snapping a streak of back-to-back misses.
Image Source: Zacks Investment Research
It’s worth noting that Amazon has posted sizable EPS beats in back-to-back releases, exceeding expectations by 47% and 40%. Below is a chart illustrating the share reaction to each of the company’s previous three prints.
Image Source: Zacks Investment Research
Apple
Apple’s $1.19 per share estimate for the upcoming release is up a small 0.8% over the last 60 days, reflecting slight bullishness. The company’s earnings are forecasted to retract a modest 1% from the year-ago quarter.
Image Source: Zacks Investment Research
The tech titan is expected to post $81.3 billion in quarterly revenue, which reflects a modest 2% decline from year-ago sales of $83.0 billion. The quarterly estimate is down a fractional 0.1% since the end of May, reflecting neutrality among analysts.
While iPhone revenue remains important, Apple’s Services results (cloud services, App Store, Apple Music, Apple Pay, and others) will also be closely monitored, as it’s quickly become a new source of growth for the company.
The Zacks Consensus Estimate for Services revenue resides at $20.8 billion, 6% higher than the year-ago quarter. In its latest release, Services revenue of $20.9 billion reflected a quarterly record.
And to top it off, our expectation for quarterly iPhone revenue stands at $40.1 billion, 1.4% lower than the year-ago quarter. The technology titan exceeded iPhone revenue expectations by 4% in its last quarter.
Apple posted results above estimates in its latest release, with shares reacting favorably post-earnings. Below is a chart illustrating the share reaction to each of the company’s previous three prints.
Image Source: Zacks Investment Research
Bottom Line
With an extensive list of companies scheduled to unveil quarterly results this week, investors will have more than plenty to remain busy with. So far, earnings have been better than expected, helping us avoid the ‘earnings apocalypse’ many had feared.
On Thursday, after the market’s close, we’ll hear from heavyweights Apple AAPL and Amazon AMZN.
Analysts have primarily left their top and bottom line expectations unchanged for both companies over the last several months, with investors likely to focus on Amazon’s AWS and Apple’s Services results.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
