Apple Investors Expect 'Blow-Out' Performance for Last Quarter

CUPERTINO, Calif. ( TheStreet) -- Apple ( AAPL) investors are confident the tech company will deliver strong second-quarter results after the market close today, its falling stock price notwithstanding.

"Apple is firing on all cylinders, especially in China," said Ernie Varitimos, who runs the Apple Investor Trade Room, in an email to TheStreet. "I'm expecting Apple to have another blow-out quarter -- the real mystery is how will the market react?"
Apple investors are confident ahead of the tech giant's second-quarter results.

The Cupertino, Calif.-based firm is coming off a stellar first quarter, which saw the company blast past analysts' estimates, boosted by impressive holiday season sales.

Chad Brand, president of Peridot Capital Management and author of the Peridot Capitalist blog, said a repeat of the first quarter could be a stretch.

"I would expect a strong quarter, as usual, for Apple," he wrote in an email. "A blowout on the magnitude of last quarter is far less likely, though nothing would be surprising."

Apple sold a massive 37.04 million iPhones, along with 15.43 million iPads, and 5.2 million Macs during the first quarter, setting the stage for a major earnings and revenue beat.

Brand, however, told TheStreet that he's not overly concerned about individual product performance. "As a long-term investor, the details about each product line (shipment figures, etc.) don't concern me that much," he said. "I am really interested in an Apple TV product as the next catalyst for the stock, but we won't get any details on that until the last minute, so a few quarters of waiting still remain."

Rather, the Peridot Capital president wants the results to inject some life into Apple's slipping share price. "My hope for this quarter would be that the numbers are strong enough that the stock can get back to the low- to mid-$600s, where it was recently," he wrote. "My fair value target is in the $700 range, before seeing the forthcoming TV product."

Since hitting an all-time high of $644 on April 10, Apple's stock has slipped more than 13%. Apple shares were down $13.40, or 2.3%, to $558.30 today.

Varitimos, though, shrugged off the sliding share price, which he says doesn't reflect Apple's fundamental strength. "Apple's sell-off prior to earnings might be interpreted as the market discounting a so-so quarter, perhaps they're discounting new leadership," he wrote. "But this flies in the face of everything we observe."

Analysts surveyed by Thomson Reuters expect Apple to report revenue of $36.8 billion and earnings of $10.04 a share, compared with sales of $24.67 billion and earnings of $6.40 a share in the prior year's quarter.

"I expect results to be in line with expectations," noted Apple investor Michael Yoshikami, the CEO and founder of Destination Wealth Management, in an email. "The street will be focused on iPad sales, in particular, especially as Mac sales may be on the low end of projections."

Sterne Agee analyst Shaw Wu expects the tech behemoth to ship 29.5 million iPhones, 12.3 million iPads and 4.3 million Macs. Topeka Capital Markets' Brian White, forecasts 29.6 million iPhones, 11.58 million iPads and 4.78 million Macs, but notes that iPhones and iPads have upside potential.

"IPhone sales will need to be a surprise to positively impact the stock, and I expect that not to occur, as Verizon ( VZ) has already reported slowing activations," added Yoshikami. "The stock will likely await iPhone 5 for its next push upward."

--Written by James Rogers in New York.

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