Apple earnings: A year ago, quarterly earnings per share amounted to USD 2.1, now the market expects a result of about 10% lower

Apple earnings: A year ago, quarterly earnings per share amounted to USD 2.1, now the market expects a result of about 10% lower

Pawel Majtkowski Pawel Majtkowski 27.01.2023 15:08
To some, the event of the week could be the earnings of Apple, which, according to eToro Market Analyst, usally achieves its best quarterly results in the last quarter. Another important earnings report this week is McDonald's. The resulting weakening of the dollar is also helping Apple's sales outside the US - which account for 60% of the company's total sales Apple - the world's most valuable listed company - will present its results on Thursday, and this could affect the market in several ways. Apple accounts for a quarter of the entire capitalization of the IT sector in the US, and it is the most valuable sector in the S&P500 index. Apple has had a good start to the year, although its results are currently a reaction to very strong demand during the pandemic. A symbol of this is the decline in smartphone sales by 18% in the last quarter. Apple has so far avoided job cuts or spending cuts, which tsunami we see now across the American IT industry. The approaching end of interest rate hikes should help reduce financial costs and thus increase the value of the company. The resulting weakening of the dollar is also helping Apple's sales outside the US - which account for 60% of the company's total sales. Apple faces challenges, but also opportunities, similar to all companies in the IT industry. First of all, we see a shift from simply selling hardware to offering services. In this regard, Apple already has a lot of experience offering services from Apple Music, through TV+ to Apple Pay. And practically always becoming a serious rival for companies already operating in a given industry. Thanks to the services, Apple was able to significantly improve its margins, which allowed it to maintain a valuation above the market, unlike many of its large tech companies. Secondly, Apple is taking advantage of the wave of increased demand for luxury products. The price of the cheapest iPhone in the US is currently just under $1,000, and the most expensive are approaching $2,000. Outside of the US market, these prices are even higher. Thanks to this, Apple, having a 20% share in the global smartphone market, obtains as much as 80% of the industry's profits. This also helps the company in the situation of a significant drop in demand for smartphones that we are currently observing. Read next: US GDP: Growth slowed down slightly from 3.2% in Q3, but the data show that the US economy is still avoiding recession| FXMAG.COM What challenges does the company face? Above all, Apple is trying to reduce over-reliance on China in its supply chain. However, production is not transferred to the USA or Europe, but to countries in Southeast Asia. And such relocation in the initial production period generates significant costs and many problems. Secondly, consumers and investors want the company to operate in accordance with the principles of ESG (Environment, Social Responsibility, Corporate Governance). For this reason, the company was one of the first to publish information about its supply chain and also experienced pressure to reduce executive salaries. Tim Cook just cut his salary by 40% after only 64% of shareholders approved last year's compensation plan (say-on-pay vote). The company usually achieves its best quarterly results in the last quarter of a calendar year. It will be no different this time. A year ago, quarterly earnings per share (EPS) amounted to USD 2.1, now the market expects a result of about 10% lower. However, maybe Apple will surprise us positively, because so far 65% of companies from S&P500 reporting results for the fourth quarter have achieved them better than analysts predicted. It is worth remembering that McDonald's is a company that usually gains during a recession, because consumers limit their spending and move from more expensive restaurants to McDonald's McDonald's, the global restaurant chain, will publish its results on Tuesday. It is very likely that this will be another quarter in which the company will beat analysts' expectations. The company is struggling with rising costs due to inflation. This mainly concerns the increase in wages and food prices. The company has already said it will start layoffs from April to prepare for the recession, thereby reducing costs and improving competitiveness. It is worth remembering that McDonald's is a company that usually gains during a recession, because consumers limit their spending and move from more expensive restaurants to McDonald's.
Philips In The Netherlands Is Reporting Layoffs, Multiple Drone Strike Targeting Factories In Iran

Another Sector Announced Layoffs, Hasbro Reduced Its Workforce, IBM And SAP Have Joined Technology Companies That Are Reducing Employment

Kamila Szypuła Kamila Szypuła 27.01.2023 11:21
Mass layoffs began to spread beyond the tech sector. Hasbro is joining the wave of companies cutting jobs as the global economy slows in response to rising interest rates and other macroeconomic factors such as a reduction in consumer spending. Dow, IBM and SAP announce they will lay off thousands of workers. Layoffs in Hasbro Economic uncertainty is spreading to sectors beyond technology and media. Hasbro Inc said it will eliminate 15% of its global workforce this year. The toy and entertainment company said the reduction, which will affect around 1,000 jobs, will take effect in the next few weeks. Drop in sales Retail companies have seen their sales decline, especially during the crucial holiday season as consumers cut back on discretionary purchases amid rampant inflation and recession fears. Hasbro also released preliminary results for the fourth quarter, showing that revenue fell 17% to $1.68 billion compared to the previous year. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM Hasbro share price The stock has fallen 29% in the last 12 months. After that in the new year HAS stock price rose, this week saw a significant drop from above 65.0 to 60.50. Layoffs in Dow, IBM and SAP In the US alone, more than 150 tech companies have announced plans to lay off 55,000 jobs since early January. Dow, IBM and SAP have joined a line of companies planning to shed thousands of jobs to prepare for a deteriorating economic outlook. Unlike Microsoft Corp. and Google parent Alphabet Inc., which announced more layoffs this month, the companies did not drastically increase staff numbers during the pandemic. Instead, the leaders of these global giants said they were shrinking to accommodate slowing growth or to respond to weaker demand for their products. Many CEOs say companies are starting to look more closely at hiring. Four companies have cut more than 10,000 jobs this week, a fraction of the total workforce. Still, the decisions mark a shift in sentiment in the executive suites, where many leaders are retaining workers after struggling to hire and retain them in recent years as the pandemic disrupted jobs. Planned layoffs of 3,000 employees at SAP affect about 2.5% of the business software maker's global workforce. Chemical giant Dow said on Thursday it was laying off about 2,000 employees. The Midland, Michigan company says it currently employs about 37,800 people. Management said they intend to cut costs by $1 billion this year and close some assets. According to IBM's latest annual report, the plan to eliminate around 3,900 roles would mean a 1.4% reduction in workforce to 280,000. Not all companies are on layoffs. Walmart Inc., the country's largest private employer, said this week it was raising starting wages for U.S. hourly workers to $14 from $12, amid a still tight labor market for frontline workers. Chipotle Mexican Grill Inc. said on Thursday it planned to hire 15,000 new employees to work at its restaurants, while aircraft maker Airbus SE said it would hire more than 13,000 new employees this year. Airbus said 9,000 new jobs will be located in Europe, with the rest in the US, China and other countries. Dow share prices Dow Inc shares rose in the new year until they finally stopped below 60.00. IBM share prices IBM shares have fallen drastically recently. IBM stock prices are below 135.00. SAP share prices SAP shares similarly to IBM rose in the new year, and recently started its decline. Currently, SAP share prices have fallen from 116.16 to 114.10. Source: wsj.com, finance.yahoo.com
Most probably, the ECB will not change the direction of its credit and monetary policy. Tesla report for Q4, 2022 might not live up to the expectations of analysts, though it should show much better revenue than in Q4, 2021

Tesla reports decent results. EPS reaches $1.19, operating profit hit $3.9bn

Pawel Zapolski Pawel Zapolski 26.01.2023 16:21
Elon Musk 's company showed good, and sometimes record-breaking results. Overall, it did not disappoint analysts. The Q4 2022 report was touted by the media as the most important earnings release in Tesla's history. And it turns out that it was very successful, just like the whole of 2022. In the fourth quarter of last year Tesla generated the highest quarterly revenue in history, as well as operating profit and net profit. Throughout 2022, Tesla's revenue grew 51% y/y to $81.5 billion, and profit doubled to $12.6 billion. Importantly, the results of Elon Musk's company generally did not disappoint analysts. Earnings per share for the fourth quarter was $1.19, versus analysts' expectations of $1.13. Operating profit reached $3.9 billion, up from $3.7 billion in the third quarter, and analysts expected $4.2 billion. Tesla maintains margins, focuses on cost reduction Tesla's operating margin was 16.8% in full-year 2022, 16% in Q4 alone. Operating profit in the entire 2022 amounted to USD 13.7 billion, and in the fourth quarter alone USD 3.9 billion. Tesla's operating margin compared to the automotive industry and S&P500   Source: company However, the results for the first quarter do not have to be so great . Recall that in early 2023, Tesla dramatically reduced the prices of its EVs around the world. Why? Due to the gloomy macroeconomic environment, which has created uncertainty around the demand for expensive electric cars and doubts about the stability of Tesla's profit margin. Read next: McDonald's earnings: Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44 | FXMAG.COM “As we enter 2023, we are aware of unfavorable macroeconomic conditions. However, our team is used to challenges. We are accelerating cost reduction and want to increase production efficiency,” Tesla wrote in the report. Tesla - financial results on an annual basis  Source: company Tesla produces and delivers more and more cars In 2022, Tesla delivered a record 1.31 million cars to customers (an increase of 40% y/y). It produced 1.37 million vehicles, 47% more than in 2021. Tesla plans to produce 1.8 million cars this year. Wall Street expected 1.9 million units. Tesla assures that in the coming years it has a plan to increase production at an average annual rate of 50%. She also assured that production of the Cybertruck at Gigafactory Texas should begin this year. Interestingly, last year Tesla has significantly increased the number of vehicle charging stations. It went up by 35% y/y to 4.7k. Tesla - operational data (annual basis) Source: company
In Europe Investors Reacted Positively To Reports

In Europe Investors Reacted Positively To Reports

Jakub Novak Jakub Novak 26.01.2023 14:10
The sharp growth of US tech stocks boosted market sentiment amid optimistic earnings forecasts from electric car maker Tesla Inc. Futures contracts on the Nasdaq 100 index rose by about 0.5%. Tesla jumped more than 8% during premarket trading in New York after beating earnings and sales estimates. Futures on the S&P 500 index added 0.3%, and the industrial Dow Jones gained 0.2%. Europe stocks In Europe, investors reacted positively to reports from Nokia Oyj Telecommunications Group and chipmaker STMicroelectronics NV, which helped the Stoxx 600 index gain more than 0.5%. Although companies are not boasting of high figures they are not disastrous either, which keeps the demand for risky assets, including stocks. The January growth is exaggerated given the recession risks. However, next week's Federal Reserve meeting may confirm that the market and investors were right. China The buoyant market sentiment was also linked to China, where data on holiday and tourism spending showed that the country's recovery is gaining momentum. On the first trading day after the Lunar New Year, the Hang Seng Index jumped by 2.4% and closed at its highest level since March 1, 2022. US GBP Expectations of a soft landing of the US economy and that the Federal Reserve is nearing the end of its rate hike cycle are also pushing investors to buy cheaper assets. US GDP reports for Q4 this year are expected today, as well as employment data, which will help determine the Fed's future policy course. Euro The euro is down slightly, but it is getting continued support from statements by European Central Bank officials, who continue to argue in favor of further significant policy tightening in the coming months. Bond yields in the Eurozone rose by several points. Oil and Bitcoin Oil prices continued to rise amid expectations of a rebound in demand in China. Bitcoin fell by more than 2%, wiping out much of Wednesday's gains. S&P 500 index As for the S&P 500 index, the situation remains on the side of bulls. The index may continue to grow but bulls need to protect the support level of $4,010 as well as take control over $4,038. After that, we may expect a more confident spurt to $4,064. At the same time, it would be difficult to reach above $4,091. If the pair declines and we see weak activity from bulls at $4,010, they will have to protect $3,980 and $3,960. Breaking through this level, the index may be pushed to $3,923.   Relevance up to 12:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333364
McDonald's earnings: Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44

McDonald's earnings: Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44

Gary Thomson Gary Thomson 26.01.2023 11:11
We're past Microsoft and Tesla earnings, so now it's over to other big names - McDonald's and Apple, which reveal their earnings next week, on January 31st and February 2nd respectively. Gary Thomson, Chief Operating Officer at FXOpen UK, shares his thoughts on both companies' performance. FXMAG.COM: Earnings season is underway: what do you expect from McDonald's and Apple next week? Gary Thomson, Chief Operating Officer at FXOpen UK: Over the past five days, McDonald's shares have been reasonably stable in value, apart from a sudden dip at 9.30am on January 24 during the US trading session, which caused the price to go down from $269 per share to $248 in a very short space of time. This recovered almost immediately and just 30 minutes later it was back to $269 which it remains at today. Taking a slightly longer view, McDonald's shares have been trading at relatively high values since November 2022 compared to earlier in the year, and have maintained their value ever since. Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44. The reported EPS for the same quarter last year was $2.23. The analysts which have so far provided a forecast have estimated a median target of 294.00, with a high estimate of 328.00 and a low estimate of 250.00, which is a considerable increase of around 9.3% on average from the previous median price. If this comes to fruition, it is entirely possible that the stock could at least hold its high position, or even raise in value a little more. If the latter takes place, it would place McDonald's stock at the higher end of its average values for the past 12 months. Read next: Whereas a year ago, inflation was at a 50 year high, and double figures were being approached, inflation in the United States had declined to 6.5 percent in December | FXMAG.COM As far as Apple is concerned, the last few months have not been ideal for US tech stocks in general, with many of them having declined in value over a 12 month period compared to their values at the beginning of the year 2022. Some large Silicon Valley firms have recently announced significant staff redundancies, which despite being a sign of hard times, has recovered their share prices due to potential cost savings. Apple could potentially be in the same category as those who have looked to save during hard times such as Alphabet (Google) and Meta (Facebook). The estimated median target for the forthcoming earnings report for the fourth quarter of 2022 shows that analysts think that a healthy 20%  increase in median target is possible for Apple, and whilst Apple has not been immune to the tech stock slowdown, its values have been climbing over the period of the past 30 days, which is encouraging.
Trump Returns To Social Media, Meta Will Restore The Former President's Account

Trump Returns To Social Media, Meta Will Restore The Former President's Account

Kamila Szypuła Kamila Szypuła 26.01.2023 09:49
Meta Platforms Inc., the mother of Facebook, has said it will bring back former President Donald Trump's Facebook and Instagram accounts. Trump Has Been Banned Meta suspended Trump's Facebook account indefinitely in January 2021 after determining that he praised the violence committed by his supporters on the United States Capitol in response to false claims of election rigging. His Instagram account has also been suspended. The ban was initially supposed to last 24 hours when the company on Wednesday said it had removed Trump's video that repeated baseless claims that the election was rigged and expressed support for the protesters. Trump, like Republican lawmakers, criticized the efforts of social media companies in the run-up to and after the November 3, 2020 presidential election, claiming that their content censorship efforts were aimed at suppressing conservative views. The group opposed the ban in principle indefinitely. Facebook in June 2021 said the suspension would last at least two years and that it would reverse its decision in January 2023, two years after the original suspension. Also at that time, a YouTube spokesperson announced that any channel posting new videos that spread misinformation about widespread election fraud would be sanctioned, temporarily restricting content uploads or live streaming. Trump opposed the suspension at the time. Facebook has been more important to Trump Trump was a regular user of social media platforms before running for office and while in the White House. Facebook has historically been more important to Trump as a fundraising tool. While Trump was suspended from the platform, his campaign continued to run ads on Facebook. Truth Social After being effectively banned from major social media platforms, Trump launched Truth Social, where he has nearly five million followers. Truth Social launched in the United States, but some potential users reported that they couldn't create an account or were getting error messages when trying. Others have been asked to put themselves on a waiting list. Trump on his social media platform Truth Social said: "Something like this should never happen again to a sitting president or anyone else who doesn't deserve revenge!" Banned on Twitter While in the White House, Trump relied heavily on social media to communicate with his supporters, often bypassing his advisers and traditional media by posting directly to Twitter. Twitter Inc. blocked Trump's personal account in January 2021, citing the risk of further incitement to violence following the attack by a mob of his supporters on the United States Capitol just days earlier. Elon Musk reinstated Trump's account last year. Before Musk took over Twitter, he said in May that he plans to do so after taking over the platform. Musk closed the $44 billion deal in October and lifted the suspension in November, days after Trump said he was running for the White House again. Trump has not resumed posting on Twitter since his account was restored on the platform. Meta share prices After a significant decline last year, Meta's shares are in an uptrend this year. Currently, Meta prices have reached the level of 141.50 compared to the beginning of the year when their level was 124.74. Source: wsj.com, finance.yahoo.com

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Markets comments

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Big Tech Companies with Their Stocks - Examples:

         
  • Amazon (AMZN)
  • Adobe (ADBE)
  • Alphabet (GOOGL)
  • Metaverse (FB)
         
  • SONY (SONY)

In time of changes, some investors wonder if it's the time to invest in Metaverse.

Known medical Stocks:

Moderna (MRNA)

Known sport stocks:

Nike (NKE), Peloton (PTON)

Popular brands and their stocks:

McDonald's (MCD), Starbucks (SBUX), Coca Cola (KO), HP (HPQ), nVidia (NVDA), Pinterest (PINS)

Popular indices: 

Source: https://www.tradingview.com/symbols/XETR:DAX/
    •  UK 100 (FTSE 100) Price Chart:
Source: https://www.tradingview.com/symbols/UKXGBP/

Some of investors might be interested in Emini Dow Jones and Emini S&P 500.

Ones to watch, role models: Warren Buffet, Jeffrey Bezos, Elon Musk, Bill Gates.

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