Apple's Earnings Outlook

Apple AAPL will be releasing its next round of earnings this Wednesday, January 27. For all of the relevant information, here is your guide for Wednesday's Q1 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Apple reporting earnings of $1.41 per share on revenue of $103.28 billion. In the same quarter last year, Apple reported earnings per share of $4.99 on revenue of $91.82 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street consensus estimate for earnings would represent a 71.74% decrease for the company. Sales would be have grown 12.48% from the same quarter last year. Apple's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Apple were trading at $142.92 as of January 25. Over the last 52-week period, shares are up 75.82%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Apple is scheduled to hold the call at 17:00:00 ET and can be accessed here.