Earnings Preview: Apple Reports Fiscal Q1 Results Tuesday

| About: Apple Inc. (AAPL)

Apple Inc. (NASDAQ:AAPL) is expected to report last fiscal quarter's results after the closing bell on January 24, 2012. Let's review how Apple has performed in recent quarters. The company was founded in 1976 and is headquartered in Cupertino, California. AAPL trades an average of 8.9 million shares per day.

52 Week High: $431.37
52 Week Low: $310.50
Book Value: $82.45
Float Short: 1.07%

Analysts are expecting an improvement of $2.96 in earnings per share compared to last quarter's results of $7.05. A beat of $10.01 per share will top the estimated per share earnings. Analyst estimates range between $8.88 and $11.26 per share. I believe Apple will beat the mean estimate.

The P/E ratio has been under pressure, as the current trailing twelve months P/E ratio is 15.5, while the forward P/E ratio is now 12.16. It will be interesting to see if pricing is currently at a discount, or if the market has been correct to price in lower growth expectations. With a price tag of over $400 a share, one has to wonder. Still, I remain somewhat bullish without conviction and without owning shares. I would own shares if Apple paid a dividend and they certainly have enough cash to do so. As long as they don't I will remain on the sidelines.

The chart certainly looks bullish with all the important moving averages trending higher. Other than a lack of dividends, there is not much to dislike about the company or the stock. One must wonder if Apple will be able to keep the magic going, but the stock is still relatively cheap compared to revenue and profits, so even a pull back in the bottom line should not be very painful for shareholders. In fact, all else being equal, I would look to pick up some shares or write put options to collect premium.

For the same fiscal period year-over-year, revenue has improved to $108.25 billion for 2011 vs. $65.23 billion for 2010. The bottom line has rising earnings year-over-year of $25.92 billion for 2011 vs. $14.01 billion for 2010. The company's earnings before interest and taxes are rising, with an EBIT year-over-year of $33.79 billion for 2011 vs. $18.39 billion for 2010. Rising revenue along with rising earnings is a very good sign, and what we want to see with our companies. Be sure to check the margins to make sure that the bottom line is keeping up with the top line.

Here is a look at the fiscal year revenue. What a growth pattern this chart demonstrates:

paid2trade.com revenue gross bar chart for AAPL Click to enlarge

Gross reported revenue compared to the mean estimate (rounded:

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 29.69 B $ 28.27 B $ -1415.50 M -4.77%
Jun-11 $ 24.96 B $ 28.57 B $ 3.61 B 14.46%
Mar-11 $ 23.39 B $ 24.67 B $ 1.27 B 5.44%
Dec-10 $ 24.37 B $ 26.74 B $ 2.37 B 9.72%
Sep-10 $ 18.93 B $ 20.34 B $ 1.41 B 7.47%
Click to enlarge
M = millions, B = billions.
Differences are rounded.
Some one-time items are often excluded in reported EPS.

paid2trade.com Quarterly Estimates And Actual EPS results AAPL Click to enlargeReported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for AAPL:

paid2trade.com short interest tool. The total short interest number of shares for AAPL Click to enlarge

The number of days to cover short interest based on average daily trading volume for AAPL. This small level of short interest is bullish, as it signals smart money is not betting against the company:

paid2trade.com number of days to cover short interest based on average daily trading volume for AAPL Click to enlarge

I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the confirmed symbols from earnings.com that I believe to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.