Apple (AAPL) will report its fourth quarter earnings this afternoon at 16:30 ET. There is a conference call scheduled for 17:00 ET.

Q4 S&P Capital IQ consensus calls for EPS of $2.84 (-2% yr/yr) on revenue of $63.07 bln (-0.2% yr/yr). As of the Q3 release, the company guided for Q4 revenue of $61-64 bln and gross margins of 37.5-38.5% vs 38.3% last year.

The Street is expecting Q4 total gross margins to be near 37.9% and services gross margins to near 64%. Q4 iPhone revenue is expected to near $32.5 bln, -14% yr/yr.

TECHS:

AAPL has a $1.1 trillion valuation and trades at ~19x FY20 EPS estimates. The multiple is roughly two turns lower backing out the net cash balance.

Based on the weekly AAPL Nov01 $242.50 straddle, the options market is currently pricing in a move of ~5% in either direction by weekly expiration (Friday).

On a positive report, look for resistance near the $249-251 area, while support sits near the $234-238 vicinity.

Suppliers to watch: SWKS, CRUS, AVGO, QRVO, TSM, and QCOM, among others (SMH); SSNLF, LPL (for displays) and LITE, FNSR and IIVI (for FaceID).

RESULTS:

  • Apple reports Q4 iPhone revenue of $33.4 bln (-9% yr/yr) vs $32.5 bln ests (243.26 -0.03)

  • Apple prelim Q4 $3.03 vs $2.83 S&P Capital IQ Consensus Estimate; revs $64.04 bln vs $62.86 bln S&P Capital IQ Consensus; sees Q1 rev $85.5-89.5 bln vs. $86.2 bln consensus

  • Apple sees Q1 gross margins of 37.5-38.5% vs 37.8% ests and 38.0% last year.

  • Apple reports Q4 total gross margin of 37.9% vs 37.9% ests and guidance of 37.5-38.5%

  • Apple reports Q4 services gross margin of 64.1% vs 64% ests

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