Fourth Quarter Earnings: Can Apple Stay on Top? (UPDATED)

Jacob Harper |

UPDATE: Apple beat earnings expectations, yet still dropped slightly, as revenues was up, but profits were down from the same quarter last year.

The company sold 33.8 million iPhones, a new quarterly record, which topped estimates by 1.8 million. The company also met iMac sales exactly, moving 4.6 million units. However, they slightly missed iPad estimates, selling 14.1 million in the quarter against expectations of 15 million.

For their fourth quarter 2013 earnings report, Apple reported a net gain of $7.5 billion, or $8.26 per share, versus the net gain of $8.2 billion, or $8.97 per share, from the same period a year ago. Revenue for the quarter was $37.5 billion, as compared to $36 billion from the previous year. Analysts were expecting a net gain of $7.92 per share on revenues of $36.82 billion.

Apple's stock was down 1.73 percent near the end of the trading day to hit $520.71 a share.

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After the bell on Oct. 28 Apple Inc. (AAPL) will report their eagerly awaited fiscal fourth quarter earnings from their headquarters in Cupertino, CA.

The earnings issuance will not just include the quarterly profits and revenues for the world’s largest company, but the first official sales tally for the newly-launched iPhones 5s and 5c, which will paint a clear picture of Apple’s future as market leader, making this report perhaps the most hotly anticipated one of the year.

This Year’s iPhone(s)

In September Apple released two iPhones simultaneously a unique development in the history of their flagship product line. The 5s featured a fingerprint scanner and significantly improved speed, and served to continue the high-end reputation of the line. The 5c was the cheaper model, featuring an array of color options and intended to appeal to both emerging markets like China and domestic teenagers, two demographics Apple has sought to expand into.

The release of two iPhones simultaneously was a risky, untested move, and the report should clue in whether it was successful or not. All Apple has hinted about sales numbers was after release weekend, when the company claimed they moved “9 million iPhones” without specifying the split between the 5s or 5c.

The 5s has been plagued by supply problems, and has most likely been outselling the 5c by a wide margin. Ameliorating this problem is key for the company heading into the holiday season.  Gene Munster, an analyst for Piper Jaffray, wrote in a note to clients. "We believe [Apple's] … guide may depend heavily on whether iPhone 5s supply improves."

The China Question

Another first for Apple for this launch cycle was the fact that the 5s and 5c were released in China and the US at the same time. This certainly skewed the “9 million” number touted by Apple higher. And of course, raised the question as to how many of the 9 million were moved in America, and how many in the East, where Apple is far from being the major player they are elsewhere.

That market is dominated by local companies and South Korean giant Samsung, with Apple being a distant fourth in the smartphone market there. Significantly improving iPhone sales in China would be a huge victory for Apple, and could help reverse a yearlong trend towards declining profits.

Also of importance is finally closing a much-needed deal with Chinese telecom giant China Mobile ($), who could significantly amp us Apple sales.

Those Pesky Profits

Analysts expect Apple to ring in an EPS of $7.92 a share, which for any other company on the planet would be considered a major win. However, in the same period a year ago, Apple scored earnings of $8.97 a share, and saw their shares top $700.

Reversing that 12 percent decline year over would reinvigorate investors, who saw the company’s shares nearly halved in the six months between its Sept. 2012 peak and April 2013.

Prior to the earnings report, Apple had edged up .39 percent to hit $528.09 per share.

For their third quarter 2013 earnings report, Yum! Brands reported a net gain of $152 million, or $0.85 per share, versus the net gain of $471 million, or $0.99 per share, from the same period a year ago. Revenue for the quarter was $3.46 billion, as compared to $3.6 billion from the previous year. Analysts were expecting a net gain of $0.93 per share on revenues of $3.53 billion. - See more at: http://www.equities.com/editors-desk/stocks/consumer-staples/yum-brands-yum-disappoints-in-third-quarter-earnings-report#sthash.jKWYS4be.dpuf
For their third quarter 2013 earnings report, Yum! Brands reported a net gain of $152 million, or $0.85 per share, versus the net gain of $471 million, or $0.99 per share, from the same period a year ago. Revenue for the quarter was $3.46 billion, as compared to $3.6 billion from the previous year. Analysts were expecting a net gain of $0.93 per share on revenues of $3.53 billion. - See more at: http://www.equities.com/editors-desk/stocks/consumer-staples/yum-brands-yum-disappoints-in-third-quarter-earnings-report#sthash.jKWYS4be.dpuf

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Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 113.95 1.83 1.63 34,402,627
PWNNY Potash West NL ADR (Sponsored) 4.69 0.00 0.00 0

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