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
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.
- 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.
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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.
- Facebook topped estimates, but said that the amount of time users spent on the site declined.
- Strength in its cloud business once again allowed Microsoft to top forecasts despite a lackluster PC market.
- AT&T saw strong wireless growth and record-low customer defections.
- Qualcomm managed to beat expectations despite a variety of challenges including antitrust actions, a bitter legal dispute with Apple and being the subject of a hostile takeover bid from Broadcom. Qualcomm also announced new deals with Samsung, one of its largest customers.
- Lenovo posted a loss, Reuters reports, and said it will likely fail to breakeven again this quarter.
- Upfront Summit in LA, where I am interviewing Stripe COO Claire Hughes Johnson.
- In addition to Apple, earnings reports include Google and Amazon.
- Pandora is cutting 5% of its workforce in a restructuring, and is shifting more of its efforts to Atlanta and away from California, where the costs of doing business are higher, BI writes.
- Recode reports that eBay plans to move away from PayPal as its primary payments processor, shifting in mid-2000 to Dutch startup Adyen.
- Twitter substantially increased its estimate of how many people saw Russian propaganda during the 2016 U.S. presidential campaign, BuzzFeed reports.
- CNET says Nintendo is bringing Mario Kart to smartphones.
- Reuters Tech News tweets that Germany's anti-trust regulator is opening a probe into online advertising.
- NextDoor is launching in France, reaching its fifth country, per TechCrunch.
- Amazon is investing to try to spur the market for voice-based apps, Recode writes.