360-Degree Apple Earnings Preview (AAPL)

Apple Inc. (NASDAQ: AAPL) is set to report earnings after the close of trading today.  Shares broke the all-time yesterday and that happened yet again today before the report is even out.  Summer is often not the greatest time for technology, but don’t tell that to the fanboys.  At $375.19 today, the new 52-week range is listed as $235.56 to $378.65.

Thomson Reuters lists the most recent estimates as $5.80 EPS on $24.92 billion in revenues.  Next quarter’s estimates are $6.42 EPS and $27.7 billion in revenues and the next report will mark its year-end with September’s fiscal period estimates of $24.97 EPS and $103.83 billion in revenues.  Apple trades at only about 15-times expected earnings for the current year.  Can we call it a value stock?  Not really, but we can easily call it a GARP stock (growth at reasonable price). As shares have risen so much in a bad market it should be expected that a “meet estimates and reaffirm guidance” report would not be well received.

WhisperNumber.com has given the following forecast to us: Apple’s whisper number is $5.83 EPS, and it noted that Apple has exceeded the whisper number in 39 of the 52 earnings reports where it has tracked the data.

Apple’s chart has reversed the prior move when Apple was breaking down and is technically getting into some overbought territory on stochastics and RSI readings.  The 50-day moving average is all the way down at $340.45 and the 200-day moving average is ever further down at $333.27.

The analyst community may have seen one note of caution on lowering of shipments and sales, but the overall analyst community remains very positive.  Even the analyst that cut estimates had a $535 price target.  The consensus price target objective is now just over $450.00.

Call options have been very active in both the weekly expirations and in the August-2011 expirations.   The weekly expirations have already seen some 90,000 call contracts and over 30,000 put contracts.  The August expiration date has seen more than 80,000 call contracts and under 50,000 put contracts as of mid-day.  We use the monthly expirations to calculate the “expected price moves” and that is indicated to be a move of up to $15.00 in either direction today.  That figure was closer to (up to) $16.00 as of late-Monday.

JON C. OGG