Apple, Exxon & Microsoft On Deck As Earnings Season Heats Up

Today will be known as APPLE day, with the tech company releasing its quarterly data.  Analysts agree on one thing: The latest iPhone iteration will not deliver the mega sales enjoyed by the iPhone 6 line around its launch."The evidence thus far suggesting that demand for iPhone 6s is not as frothy as last year is tough to ignore," Susquehanna Financial Group analyst Chris Caso wrote in a note on Thursday.

Sales are clearly a big area of focus. After all, there is a reason why revenue is the top line in the income statement. Apple is expecting revenue to be in the range of $49 billion to $51 billion in the coming release, which would imply a year-over-year increase of between 16% and 21% from the same quarter last year.
Investors need to take a deep look at the company's fundamentals from a long-term point of view as opposed to putting too much attention on Wall Street estimates and market reactions. However, it's worth noting that Wall Street analysts are on average calculating that Apple will make $51.07 billion in revenue, so expectations are moderately above the high end of the company's guidance.

A big part of this increase is probably due to the timing of the product's availability in China. The iPhone 6 was not available there during its first weekend, but the iPhone 6s was. This means that year-over-year comparisons regarding sales in the initial weekend need to be taken with a grain of salt.
Apple announced on Sept. 28 that it sold 13 million new iPhone 6s and iPhone 6s Plus units during the initial sales weekend. This represents a 30% increase from 10 million units for the iPhone 6 and iPhone 6 plus in the first weekend of sales last year.

The biggest company on earth is expected to be the largest contributor to third-quarter earnings growth for the S&P 500 technology sector and the second biggest contributor to S&P 500 earnings as a whole last quarter. As of Friday, third-quarter tech earnings were expected to grow 2.1%. Excluding Apple, the tech sector is poised to see a third-quarter earnings decline of 3%.
Ahead of Apple’s results, analysts upped their price target on Apple shares Monday to $135 from $130, 17% above where the stock recently traded Monday at $115.53. They forecast 50 million iPhones were sold last quarter and said the bias to results is to the upside.
Apple will unveil its outlook for the holiday shopping season on Tuesday and analysts expect growth—just nothing on par with last year's bonanza.
The holiday quarter is projected to bring Apple sales of $77 billion and profit of $18.1 billion or $3.22 a share, according to data compiled by Bloomberg. That would work out to sales growth of 3.4 per cent, which is a far cry from the 30 per cent Apple put up last holiday season.
One hundred S&P 500 Index companies are due to report this week — including behemoths Microsoft and Exxon Mobil. There are close to 500 releases on the global calendar this week.
 Exxon Mobil is expected to report its third-quarter results first thing Friday morning. The consensus analyst estimates call for $0.89 in EPS and revenue of $63.88 billion. This is the world’s largest international integrated oil and gas company, and it reported better second-quarter revenue numbers, but earnings came in below Wall Street estimates. Merrill Lynch is very positive on this energy sector play for the long term, as the overall corporate strength of the massive integrated giant plays a significant part in the its usually solid earnings reporting pattern. The firm has stressed in the past the company’s global downstream chemical segment plays a huge part for Exxon. It may be a part that many others on Wall Street don’t fully appreciate, as the segment contributes an estimated 16% of overall total revenue.