A Glimpse Into Apple Inc. (AAPL) 2Q FY17 Earnings

Apple Inc. (NASDAQ:AAPL) reported fiscal second-quarter results that were mixed with a conservative 3Q:FY17 outlook, sending shares down nearly 2% in after-hours trading.

For the past quarter, the tech giant reported sales of $52.9 billion, which fell slightly short of consensus estimate of $53 billion, while pro forma EPS of $2.10 beat consensus estimate of $2.02.

iPhone shipments of 50.8 million were a touch worse than consensus estimate of 52 million, and at a slightly lower ASP. Results for other products were mixed, with iPads and Macs better than the Street had expected.

Management guides June revenue to be $43.5-45.5 billion, below consensus’ $45.70 billion estimate, while gross margin is projected at 37.5-38.5%, compared to consensus’ 38.2% estimate.

Drexel analyst Brian White noted, “We believe investors will be focused on the iPhone 8 this fall, along with the company’s raised capital distribution initiative, attractive valuation and potential new innovations. We continue to believe Apple remains among the most underappreciated stocks in the world.”

CEO Tim Cook said, “We are proud to report a strong March quarter, with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus. We’ve seen great customer response to both models of the new iPhone 7 (PRODUCT)RED Special Edition and we’re thrilled with the strong momentum of our Services business, with our highest revenue ever for a 13-week quarter. Looking ahead, we are excited to welcome attendees from around the world to our annual Worldwide Developers Conference next month in San Jose.”

On the ratings front, Apple has been the subject of a number of recent research reports. In a report released today, Brian White reiterated a Buy rating on AAPL, with a price target of $185, which represents a potential upside of 25% from where the stock is currently trading. In addition, BMO’s Tim Long aslo reiterated a Buy rating on the stock today, and his price target stands at $160.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian White and Tim Long have a yearly average return of 10.3% and 12.5% respectively. White has a success rate of 65% and is ranked #141 out of 4569 analysts, while Long has a success rate of 64% and is ranked #266.

Sentiment on the street is mostly bullish on AAPL stock. Out of 32 analysts who cover the stock, 25 suggest a Buy rating , six suggest a Hold and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $157.87, which represents a potential upside of 7% from where the stock is currently trading.


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