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What to Expect From Apple’s Fiscal Q4 Earnings

Apple will announce its highly anticipated quarterly earnings later this week, but what should investors be looking out for in particular?

While tech enthusiasts eagerly awaited Apple’s (NASDAQ: AAPL) virtual product events in the last couple of months, investors have had another virtual event circled on their calendars. This Thursday will see Apple report its earnings for its fourth fiscal quarter.

Up over 15% year-to-date (YTD), the stock price has continued its relatively steady rise following some mid-pandemic dips. Investors will hope the upcoming earnings report will see a continuation of this positive trend, where the company hit an all-time high of $157.26 per share in early September.

When is Apple’s earnings date?

Apple reports earnings for the September quarter of 2021 on Thursday, October 28 at 5:00 PM Eastern Time.

How can I listen to Apple’s earnings call?

Apple’s earnings call will be streamed live on the companies website. You can access the call here. To access the call transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Apple’s investor relation page.

What to expect from Apple’s earnings

Wall Street expects the company to post earnings per share (EPS) of $1.24 on revenue of $84.81 billion. This would see growth on the year-ago quarter of 69.9% and 31.1% respectively.

Apple investors will have a whole host of things to listen out for on the call, but some of the most important issues will include:

1. This quarter saw the launch of a host of new hardware products for Apple. Additions to the iMac and iPad Pro offerings will be sure to impact revenue results. New flagship phones in the form of the iPhone 13 and iPhone 13 Pro also hit the shelves, along with new iterations of the iPad and iPad Mini. These products were all launched quite late in the quarter, however, so are unlikely to have a huge bearing on revenue figures. 

The same applies to the recently announced Macbook line featuring Apple’s proprietary M1 Pro and M1 Max chips; both announced far too close to the quarter’s end. What we should be able to gain from these products though, is an insight into the current demand for Apple’s hardware offerings.

Demand is expected to be high for these products, particularly as Apple faces global supply-chain issues and semi-conductor shortages. This unusual imbalance between supply and demand could impact holiday revenue and would be something potential investors will want to keep an eye on. 

Apple will be hoping its surging services segment will help attenuate any shortfall from its hardware division. The segment, which includes offerings such as Apple Music, Apple TV, and Apple Fitness, grew by 33% in the previous quarter. It posted earnings of $17.5 billion, outperforming all other segments other than iPhone sales.

2. Following the rollout of iOS14 earlier in the year, the global advertising market has been subject to unprecedented upheaval. Apple introduced drastic changes to how it handles privacy on its devices. Tracking now has to be opted into by customers on a per-app basis, and an overwhelming majority have made the decision to opt-out of tracking. 

This has caused severe disruptions to typical advertising, with social media giants such as Facebook and Google massively impacted. Apple, however, is poised to capitalize on this change. The company’s advertising segment has tripled its market share since it introduced the aforementioned privacy changes.

Investors will be very interested to hear Apple’s advertising revenue figures following this monumental obstruction of its closest ad rivals. Apple’s ad business has certainly become more valuable as a result of their privacy changes, but just how much it will show up in the finance report is yet to be seen.

3. Apple has been embroiled in lengthy litigation with gaming company Epic since 2020. The final result of this landmark case could have huge implications for Apple’s app store revenue moving forward. Despite emerging largely victorious so far, investors will be eager to assess any potential impact the various claims and counterclaims have had on Apple’s bottom line. 

An impending antitrust lawsuit from the U.S. Justice Department (DOJ) also looms over the company. A new round of subpoenas from the DOJ has marked an acceleration in proceedings aiming to assess Apple’s business practices regarding the iPhone.

While Apple is certainly no stranger to litigation, investors will still want to hear important updates on how these cases are affecting the company. 

Apple remains a solid long-term prospect, with plenty of upside for any potential investors. Growing service and advertising revenue should make for bullish sentiments, while the company’s hardware line remains as strong as any in the world. Despite litigation woes and issues surrounding supply, investors should expect a relatively positive earnings call from Tim Cook and co. on Thursday.

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