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Apple’s Q1 Earnings: Three Things Warren Buffett Might Watch

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Jan. 29 2019, Published 8:06 a.m. ET

Apple’s first-quarter earnings

Apple (AAPL) is scheduled to release its earnings for the first quarter of 2019 on January 29 after the closing bell. Before we explore the key factors that billionaire investor Warren Buffett might watch in Apple’s earnings, let’s take a quick look at analysts’ estimates.

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Latest estimates

According to analysts’ latest consensus estimates compiled by Thomson Reuters, Apple is expected to report an adjusted EPS of $4.17 per share in the first quarter of fiscal 2019. The EPS estimate reflects an ~7.2% increase compared to Apple’s EPS of $3.89 in the first quarter of fiscal 2018.

Apple CEO Tim Cook announced a downward revision in the company’s first-quarter guidance on January 2. Cook cited weaker iPhone sales in China due to the slowing Chinese economy as one of the key reasons for the guidance cut.

Apple stock

As of the closing on January 28, the stock was trading with 0.9% month-to-date losses—compared to 5.5% and 6.8% gains from the S&P 500 Index and the NASDAQ Composite Index, respectively.

Microsoft (MSFT), Alphabet (GOOG), Facebook (FB), Amazon (AMZN), Netflix (NFLX), Oracle (ORCL), Twitter (TWTR), and Advanced Micro Devices (AMD) were trading with 3.5%, 3.4%, 3.3%, 12.5%, 9.0%, 25.4%, 9.7%, 15.3%, and 9.3% month-to-date gains, respectively. In contrast, Qualcomm (QCOM) and Intel (INTC) fell 11.0% and 0.5%, respectively.

Chinese companies including Tencent Holdings (TCEHY), Alibaba (BABA), and Baidu (BIDU) have seen 10.2%, 15.9%, and 5.6% gains in January, respectively.

Buffett’s investment firm, Berkshire Hathaway (BRK.B) has a huge position in Apple. So, Buffett will likely be watching Apple’s first-quarter earnings report on January 29.

Next, we’ll discuss one of the most important factors that Buffett might be looking at in Apple’s earnings on January 29.

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