Here's Why Apple Is Poised To Outperform

Seeking Alpha – Cupertino-based Apple (NASDAQ: AAPL) has a long history of topping Wall Street estimates and the iPhone maker is set to repeat it after the closing bell today. According to Zacks Equity Research, the iPhone maker is expected to earn $1.86 per share on revenues of $51.2bn in the fiscal fourth-quarter 2017, up from $1.66 per share on $46.6bn in the year-earlier period. iPhone shipments, which constitutes between 60% and 65% of Apple’s sales, are projected to reach 46.4 million units in the fiscal fourth-quarter 2017, backed by accelerating sales of iPhone in China. This represents a 2.1% increase from 45.5 million units shipped in the year-earlier period.

While iPhone continues to be the major driver of its top line, Apple’s services segment consisting of App Store, Apple Music, Apple Pay and other services has become a major growth catalyst with over 185 million subscribers. With the release of iOS 11, the company expects to pull in more revenues from its App Store during the quarter. Revenues from iTunes, software and services are expected to be $7.6bn in the fiscal fourth-quarter 2017, up a staggering 20.4% from last year. Additionally, Apple is witnessing strong demand for iPad among schools driven by the wide range of multimedia features of iOS applications focused on the education sector. For the fiscal fourth-quarter 2017, iPad shipments are expected to reach about 10 million units, up 7.4% from the last year.

The iPhone maker is also giving stiff competition to the online payment giant PayPal (NASDAQ: PYPL) in the digital payment space. According to a new research from Boston Retail Partners, 36% of North American retailers are accepting Apple Pay, more than any other payment method, and another 22% plan to accept the Apple’s payment solution within the next 12 months. On the other hand, PayPal is currently being accepted at about one-third of North American retailers, and that is expected to rise to more than half within the next year – yet still short to take the No. 1 spot. Total transaction value of US digital payments is forecast to hit $738.3bn in 2017 and is expected to grow at an annual rate of 12.8% to reach $1,194.4bn by the end of 2021.

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