AAPL Stock – Plenty of Catalysts in Apple Earnings

by Dan Burrows | January 23, 2014 12:34 pm

AAPL Stock – Plenty of Catalysts in Apple Earnings

Apple (AAPL[1]) earnings are set for release on Monday after the closing bell, and with Wall Street expecting record revenue, AAPL stock is sure to move no matter what the final tally says.

AppleLogo AAPL Stock   Plenty of Catalysts in Apple EarningsThe Apple earnings date is one of the most anticipated events of the earnings calendar, and AAPL stock doesn’t look like it will disappoint.

Investors holding Apple stock have a lot to chew on, after all. Apple’s fiscal first quarter is its most important period of the year. Sales are forecast to hit an all-time high, led by record sales of iPhones. Meeting those high expectations is critical for AAPL stock.

Of even more interest to holders of Apple stock is what’s going on with Carl Icahn and China Mobile.

As for Carl Icahn, the billionaire activist investor is pressuring Apple to share even more of its cash load with shareholders. Carl Icahn purchased $500 million in AAPL stock[2] over the last two weeks, increasing his company’s stake in Apple stock to $3 billion.

Icahn tweeted that Apple “is doing great disservice to shareholders by not having markedly increased its buyback.” Carl Icahn added that his firm’s investment in AAPL stock is a “no brainer.”

AAPL Stock and China Mobile

Another development that makes the Apple earnings date loaded with extra anticipation is its new deal to sell iPhones on China Mobile, that nation’s largest wireless carrier.

InvestorPlace’s James Brumley estimates that AAPL will sell iPhones to a huge chunk of its 760 million customers[3]. And, as InvestorPlace writer Will Ashworth notes, those 760 million customers are 76% more than China’s other two major carriers combined. Ashworth writes[4]:

“With China Mobile in the fold, Apple could generate an additional 20 million in iPhone sales in 2014. That translates into an extra $9 billion in revenue and $3 per share in earnings … and should also mean a huge lift for AAPL stock.”

Setting aside those big events, Apple earnings are supposed to look pretty good, according to a survey of analysts by Thomson Reuters. Earnings per share are forecast to increase to $14.09 from $13.81 in the year-ago quarter. Revenue is projected to rise 5.4% to $57.46 billion.

Investors in AAPL stock are also looking for a lot of optimism in the Apple earnings forecast as the deal with China Mobile gets underway. It’s very early in the partnership with China Mobile, but expectations are high. As noted above, Apple could sell another 20 million iPhones this year thanks to China Mobile. So any color or numbers the company can add in the Apple earnings release will be closely scrutinized.

Regardless of how Apple earnings release plays out, between China Mobile and Carl Icahn, there will be no shortage of catalysts for AAPL stock — either up or down.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. Carl Icahn purchased $500 million in AAPL stock: http://investorplace.com/2014/01/aapl-stock-carl-icahn-apple/
  3. will sell iPhones to a huge chunk of its 760 million customers: http://investorplace.com/2014/01/aapl-stock-apple-china/view-all/#.Ut6IJ3n0Bz8
  4. writes: http://investorplace.com/2014/01/aapl-apple-stock-downgrade/

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