CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Neil is chief market analyst for Markets.com and also writes for the Investors Chronicle as ‘The Trader’, with the daily market outlook published online each morning.
Apple earnings preview: eyes on services revs, margins and China
A whopper of a profits warning at the beginning of January
has done nothing to dent Apple’s share price performance in 2019, which is +40%
higher this year. So what happens now, with expectations reset
lower? Here’s our quick take on what to expect as Apple reports its fiscal
second quarter numbers after the close on Tuesday.
It’s all about the pivot
away from iPhone unit sales to focus investor attention on Services revenues
and the wider Apple ecosystem. Of course, iPhone unit sales won’t be
Q1 marked a 5% decline in revenues company wide as revenues from iPhone sales declined 15%. Total revenues from everything else plus services was up 19%.
In its Q1 earnings update
the company provided the following guidance for Q2:
revenue between $55
billion and $59 billion
gross margin between
37 percent and 38 percent
between $8.5 billion and $8.6 billion
of $300 million
tax rate of
approximately 17 percent
Wall Street is anticipating EPS of $2.36 v $2.73 a year
ago, whilst revenues are also seen declining from $61.1bn last year to
Dial back to the Jan warning from Tim Cook and it was China where the real trouble lay. We would expect some improvement here to be seen in this quarter’s numbers with demand for iPhones picking up again in the wake of price cuts.
Services in focus
On Services, clearly the marked it eyeing another bumper
jump in revenues, which were up 19.1% in the first quarter. But the impact on
overall margins will also be important. The higher margins here should deliver
ongoing support to group margins. For Q1, it reported Services margins of 62.8%
against 58.3% in the year before.
We’ll also be looking for anything relating to its suite of
new products launched in March – credit card, streaming service, News+ and
Arcade. Whilst only News+ was available after the launch event, we may get more
of a feel of how these services will affect the bottom line – pricing will
be of particular importance. Don’t hold out for much detail in the earnings report,
although there could be something in the earnings call.
Markets will also be eyeing capital returns. A year ago the
company committed to $100 in buybacks and dividends over a two-year period. We
may well Apple outline further capital returns via an increase in the dividend
(10% is being talked about, against a 16% rise last year) and more buybacks.
Even if the number are a touch soggy the prospect of more capital returns
should keep investors on side.
Average price target from
the 36 analysts we track suggests a 3% downside to the current price at a
little short of $200. Following a strong showing so far in 2019, Tuesday’s
earnings may result in some changes to price targets on the upside.
Key focus: Are Services revenues really going to
continue to accelerate enough to offset the plateau in iPhone sales? Is there evidence of a bounce back in China?
Markets.com is the state-of-the-art trading platform provided by Markets.com. As part of Finalto Trading Ltd, a constituent of Playtech, a FTSE 250 listed company, at Markets.com we have deep knowledge of the financial markets and an incredible range of resources to continually raise the bar in the world of financial trading.
Financial products traded on margin carry high degree of risk to your capital. Spread bets, CFDs and Forex are complex high risk instruments and therefore are not suited to all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. FX, Spread Bets and CFDs are provided by Finalto Trading Ltd on an execution only basis; we do not provide any advice nor should any communication with us, either written or oral, be construed as such.
Finalto Trading Ltd is authorised and regulated by the Financial Conduct Authority (FCA), registration number 607305. Finalto Trading Ltd is incorporated in England and Wales under company number 08663212 and whose registered address is at 11th Floor Broadgate Tower, 20 Primrose Street, London, England, EC2A 2EW.
CFD and Investment Strategy Builder accounts are provided by Finalto Trading Ltd. Share Dealing accounts are offered in selected jurisdictions by Safecap Investments Limited (a company registered in Cyprus and regulated by CySEC under license number 092/08).
The information on this website is not directed at residents of the United States, Japan, Canada, Belgium or any other country outside of the UK where such distribution or use might be contrary to local laws and regulations.
Client’s funds are kept in segregated bank accounts
FSCS Investor Compensation up to GBP85,000
*depending on criteria and eligibility
£1,000,000 insurance cover**
Negative Balance Protection
Markets.com operated by Finalto Trading Ltd. Regulated by the Financial Conduct Authority (“FCA”) under licence number 607305.
Clients’ funds kept in segregated bank accounts
Negative Balance Protection
$1,000,000 insurance cover**
Markets.com, operated by Finalto (Australia) Pty Ltd Holds Australian Financial Services Licence no. 424008 and is regulated in the provision of financial services by the Australian Securities and Investments Commission (“ASIC”).
Selecting one of these regulators will display the corresponding information across the entire website. If you would like to display information for a different regulator, please select it. For more information click here.
**Terms & conditions apply. Click here to read full policy.
Marketsi An individual approach to investing.
Whether you’re investing for the long-term, medium-term or even short-term, Marketsi puts you in
control. You can take a traditional approach or be creative with our innovative Investment Strategy Builder tool,
our industry-leading platform and personalised, VIP service will help you make the most of the global markets
without the need for intermediaries.
Tracking cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers.
We’ve noticed you’re on the site. As you are connecting from a location in the you should therefore consider re-entering , which is subject to the product intervention measures. Whilst you’re free to browse here on your own exclusive initiative, viewing the site for your country will display the corresponding regulatory information and relevant protections of the company you choose. Would you like to be redirected to ?