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Apple’s Earnings Could Fall after Rising for Nine Quarters

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Apple’s Q2 2019 earnings

In April so far, Apple (AAPL) has outperformed the broader market by a wide margin. As of Tuesday closing, it was trading with 9.2% gains against just 3.5% in the S&P 500 Index. By comparison, other tech companies such as Microsoft (MSFT), NVIDIA (NVDA), Qualcomm (QCOM), and Alphabet (GOOG) have risen 6.4%, 6.2%, 52.1%, and 8.0% month-to-date, respectively. The end of the legal fight between Apple and Qualcomm has boosted investors’ confidence in both companies. Now, let’s take a look at the recent trend in Apple’s earnings and find out what analysts are estimating for its upcoming earnings.

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The trend in Apple’s earnings

In the last couple of years, the overall trend in Apple’s earnings has been positive. The company has delivered positive YoY growth in its adjusted EPS for the last nine consecutive quarters. Similarly, AAPL has managed to beat Wall Street analysts’ consensus EPS estimates for the last 11 quarters in a row.

However, Apple’s quarterly earnings YoY growth rate declined sharply in the first quarter of fiscal 2019. For the quarter ended December 2018, the company reported 7.5% positive YoY growth in its adjusted EPS to $4.18. In the previous two quarters, its earnings grew by over 40% on a YoY basis.

Estimates for Q2 2019

In the second quarter of fiscal 2019, Wall Street analysts surveyed by Thomson Reuters expect Apple to report adjusted EPS of $2.36 per share, down 13.6% as compared to its EPS of $2.73 in the second quarter of fiscal 2018.

At the end of March 31, 2019, AAPL made up about 10.14% of the Invesco QQQ Trust’s (QQQ) total portfolio. Thus, any big movement in Apple stock could have a significant impact on QQQ’s performance.

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