Apple Smashes Estimates, Starbucks Lukewarm

Zacks

Apple Inc. AAPL posted another big beat on both top and bottom lines after today's closing bell, with earnings of $2.07 per share easily surpassing the $1.87 expected. Revenues reached $52.6 billion, easily ahead of the $51.2 billion in the Zacks consensus estimate. Fiscal Q4 2017 sales of iPhones — which don't include new iPhone X sales; those numbers will register in fiscal Q1 2018 — reached 46.7 million, above the 46.4 million estimate and 45.5 million a year ago.

Revenue guidance for fiscal Q1 is $84-87 billion, which will have a lot to do with both holiday season sales and iPhone X sales hitting the tape. Gross margin estimates are for between 38-38.5%; gross margins in Q4 hit 37.9%. Apple Services (Apple Pay, iTunes, etc.) surprised in the quarter with $8.5 billion in revenues, up 34% year over year. Shares are up 3% on this news, following nearly 7% gains just in the past 5 trading days.

For more info on AAPL's earnings, click here.

Starbucks Corp. SBUX reported in-line results on its Q3 bottom line this afternoon, at 55 cents per share (a penny below the year-ago quarter). Revenues, however, posted a slight miss at $5.70 billion instead of the $5.73 billion analysts were looking for. Global comps reached 2%, but comps in the U.S. of 3% fell short of the 3.4% estimate.

The Zacks Rank #3 (Hold) coffee shop giant announced rising dividends and stock buyback programs for investors, while stating it looks for a 3-5% comps target annually. Starbucks is also planning to buy Unilever's UL Tazo business for $384 million. Shares are falling in the post-market to the tune of 5% on the news, sending SBUX shares into the red year to date. For more information of SBUX's earnings report, click here.

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