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Can Strong Q2 Results Revive Apple Stock?

 April 23, 2012 12:44 PM

(By Mani and Rich) Investors of Apple, Inc. (NASDAQ:AAPL) are waiting with bated breath for April 24th when the consumer technology giant is expected to report another strong quarterly results for the January to March period.

Apple is reporting results at a time when its shares have been showing mixed trading for the past several days due to the profit-taking.

Apple shares surged 63 percent in the past year and 39 percent year-to-date, and lost about 9 percent since April 10 as investors took profits following a recent uptick in share price to $600.

A strong quarterly results would be the much-needed impetus for the stock to get back in to the positive territory.

[Related -Fusion-IO, Inc. (FIO): Can Fusion-IO Q2 Results Cheer Street?]

Wall Street expects Apple to earn $10 a share, implying an increase of 56 percent from last year when it earned $6.40 a piece. The iStock iEstimate is $11.49. The Cupertino, California-based Apple has topped Street expectations for the 3 out of the past 4 quarters with margin of difference in double-digits.

Analysts have been increasingly optimistic on Apple as their consensus earnings expectations have increased from $8 three months ago to the current $10. Fourteen analysts have revised their profit expectations for Apple in the last 30 days.

Meanwhile, Apple is expected to deliver 48.50 percent growth in its quarterly revenues to $36.63 billion and should continue the trend of generating double-digit revenue growth in the past four quarters.

[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]

In the preceding first quarter, Apple recorded its highest quarterly revenue and earnings in its history as it reported a profit of $13.06 billion, or $13.87 a share, on revenue of $46.33 billion from strong demand for its iPhone 4S, which was released in October. The company's iPhone sales soared 128 percent to 37.04 million units, and iPad sales surged 111 percent to 15.43 million units. Apple sold 5.2 million Macs during the first quarter, a 26 percent increase over the year-ago quarter.

No wonder, 46 of the 53 analysts covering Apple rate it as "buy" or "strong buy." Five analysts have a "hold" rating on the stock and 2 analysts rate it "sell."

On the price target front, the 45 analysts mean target is $678.84, and the median target is $700. They expect Apple shares to trade at a high of $910 and a low of $270 during the next 12 months.



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