Argus Says Apple Earnings Could Turn Positive This Year

Speaking with clients in a conference call Wednesday morning, Argus Director of Research Jim Kelleher spoke briefly on technology hardware, and the way its earnings performance has lagged behind that of software.

Saying the sector was dragged down by legacy vendors like International Business Machines Corp. IBM and Apple Inc. AAPL, Kelleher noted that Apple's earnings per share were down year-over-year. Offsetting this, however, is the fact that Apple's performance is somewhat cyclical, primarily due to the iPhone, and we're in the end, or the eighth quarter, of the iPhone 6 cycle.

Related Link: Apple's $300 Billion Opportunity

All eyes have now turned to the iPhone 7, and the Argus Director believes Apple investors could likely see the company return to flat or positive earnings in the second half of 2016.

Apple shares are down about $0.81 midway through Wednesday's trading, but are up about 12 percent since reporting a top and bottom line beat for the third quarter.