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If Apple announces a profit for the second quarter on Tuesday after the bell, the conversion will go back compared to the previous year. This is according to Apple's own instructions.
Apple made headlines all year long. On Jan. 2, Apple said it would lose $ 7 billion in sales during the critical Christmas quarter, as iPhone sales in China had been hit.
Since then, Apple has taken the rare step of canceling a previously announced product, hosting a weird invitation event on its campus without new hardware products and the lack of critical details on the announced products. Recently, a dispute with Qualcomm was settled and paid for one-off amounts by analysts billions.
Apple shares continue to rise.
Since Apple announced the disappointing first quarter of the year with declining sales on an annual basis, the stock rose over 43% and last week, several analysts on Wall Street reported Apple has even raised its price targets for the stock.
This development will come as it becomes increasingly clear that iPhone sales will decline year-on-year ̵
"There's nothing good you can say about the fact that they've stopped selling sales," D.A. Davidson analyst Tom Forte said:
"If we look at our model and forecasts for the iPhone business in relation to the March quarter, we are not looking for anything magical on either the iPhone or China," said Forte.
Here's What Wall Street Expects for the Quarter According to Refinitive Consensus Estimates:
- EPS: $ 2.36. $ 2.73 last year
- Sales: $ 57.41 billion compared with $ 61.13 billion last year
Apple's story is changing
But the story of Apple rises Stocks suggest that the market is finally digesting what the company has been broadcasting for years: Apple is changing its history – it's no longer an iPhone company, even though this single product accounts for more than 60% of Apple's revenue. Instead, Apple sells a number of online recurring billing services, earning Apple more money than Amazon, Google or Facebook.
That's the message Apple was trying to send out with its March event, which was filled with celebrity and boom language about the power of creativity, but not a new hardware product or pricing or release dates for most of what about was spoken.
By announcing three new online subscription services and a co-branded credit card with Goldman Sachs, Apple underscored how many new revenue streams it could launch. After the event, only one of the products, Apple News +, was available to consumers.
Forte called the event "strange," but said that it helped investors "think about life after the iPhone."
Hook-line-and-sinker in the notion that service revenue for Apple will be a rapidly growing number, "he said.
" In our view, investors still do not fully appreciate the strength of the Apple platform on. IOS users are more concerned with mobile services and are spending ten times Android users on mobile apps, "Morgan Stanley analyst Katy Huberty wrote in a April announcement, noting that Apple has paid the number Online services double this year.
It's possible that Apple will provide investors and analysts with some details about Apple News + performance on Tuesday, even though Apple's balance sheet does not show that. that the service business is growing fast, the only data point for the service of $ 10 per month is that 200,000 people signed up in the first 48 hours it was available.
Apple had sales a year ago $ 9.19 billion, including subscriptions and fees for its app distribution platform, AppleCare warranty and money from an agreement with Google, Google's default search engine i m browser of the iPhone.
Dividends and Repurchases
Analysts and investors also want to know if Apple is spending the projected cost on return on investment. It is this time of the year.
Last April, Apple announced that it will spend $ 100 billion on dividends and repurchases next year, partly due to the tax reform passed in December 2017.
It also said that it wanted to become "net cash-neutral over time," meaning that it intends to issue all cash and securities in its balance sheet.
Forte says Apple's announcement of capital repatriation "crashes" the quarter in the event of a default.  Morgan Stanley expects Apple to announce a 10% increase in dividend and at least $ 50 billion in authorized buy-back funds.
"We continue to forecast that Apple will repurchase $ 15-20 billion of shares each quarter, resulting in diluted shares per year decreasing in the mid to high single-digit percentages per year and in the 2020 fiscal year more than $ 1.00 per share, "wrote Huberty
Apple repurchases so many stocks that it may not mind a slightly lower stock price.
" The company does not care if its stocks are not caught fire because they can then buy them back cheaper, "said Forte." Apple would love it when the stock price goes up, but it's true that this is not the case. "
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