Feb 1, 2018

Axios Login

Earnings season hit its peak with a bunch of reports yesterday. Apple, Amazon and Google parent Alphabet are all on tap today.

What to listen for on Apple's earnings call

Apple's new Apple Park headquarters. Photo: Apple

Here are the 3 big things we'll be paying attention to in Apple's earnings report later today.

1. How's iPhone X demand?

  • This is the way-more-than-$64,000-question. Apple (and investors) are counting on the high-end phone to generate a "super cycle" of higher-than-typical upgrade rates and selling prices.
  • Recent reports have suggested production cuts, but longtime Apple watchers know such reports have a decidedly mixed track record.

2. How will Apple use all that repatriated cash?

  • Expect Apple to talk about buyback and dividend strategy and, if tradition is any guide, say little about its acquisition plans.
  • Historically, Apple tends to say the same thing: It buys lots of little companies and, while it hasn't done a lot of big ones, isn't philosophically opposed.

3. Where's Apple placing its bets?

  • It's hard to know just how much insight we will get, but as always, we'll be watching for any sign of where Apple is putting its time and energy.
  • Though it doesn't typically comment on future stuff, there's a chance Apple could make a nod to the shift toward quality and performance that it is making for this year's big software releases.
  • The company also sometimes gives oblique hints on whether to expect it to go into "new categories" or not.

Other indicators:

  • Services has been the fastest growing part of Apple's business and closely watched by Wall Street.
  • In the August-to-October quarter, Apple finally showed some improvement in China. It will be interesting to see how the December quarter went in that regard.
  • The numbers: Analysts are expecting Apple to report per-share earnings of $3.82 on revenue of $86.3 billion, per Zacks.
YouTube in spotlight as Google reports results

It only accounts for about 10% of ad revenue, but expect YouTube to play a prominent role as Google discusses its business on Thursday. The site has been in the news a lot lately, and very little of it has been positive.

Other things to watch for as parent Alphabet reports earnings:

  • How are its non-advertising businesses doing, including: Google cloud, hardware like Pixel and Google Home, and Alphabet's "other bets" like Nest and Waymo.
  • The top numbers: Yahoo Finance says analysts expect EPS of $9.96 and revenue of $31.85 billion.
Want to understand Bitcoin? Try this children's book

Screenshot of "My First Bitcoin: And the Legend of Satoshi Nakamoto" from cash.me/bitcoin

Talk of Bitcoins and blockchains is unavoidable these days, but it can be tough to join the conversation if you don't speak the lingo.

There's lots of ways to get up to speed, but the most simple could be this children's book-style introduction from Square.

Earnings roundup: Facebook, Qualcomm, Microsoft, Lenovo, etc.

It was largely positive news as a number of the big tech companies posted earnings ahead of Wall Street expectations.

Take Note

On Tap

  • Upfront Summit in LA, where I am interviewing Stripe COO Claire Hughes Johnson.
  • In addition to Apple, earnings reports include Google and Amazon.