Posted April 22, 2012 13:05
We are all looking to Apple’s earnings report next week. The question that is bugging every investor is whether or not Apple will report the stellar growth that the street wants.
Apple reported $13.87 EPS last quarter. The current street consensus is for around $10 EPS. In my opinion, this seems very low. Basically, analysts are expecting 40% reduction in per share profits. That is not characteristic for Apple, even if, for some reason, they have a bad quarter.
If Apple does beat, and Europe doesn’t report anything negative, then the broader market could easily see a nice rally the following week. The recent market correction is based on the expectation of week earnings growth and European concerns. If we can get good earnings numbers, this 3-Week correction could come to a quick end. On the other hand, if Apple disappoints, the market will sell-off and likely lead to a longer correction.