This article first appeared on GuruFocus.
Apple (NASDAQ:AAPL), the iPhone maker and services provider, faces a simple earnings test: turn demand into revenue despite supply limits. Shares moved lower 0.55% to $346.99 at 12:35 p.m. ET on October 30. An AD HOC NEWS preview puts the reporting date at November 2, setting up a checkpoint for September-quarter sales and the production capacity behind them. Strong customer interest could offer little comfort if Apple cannot deliver enough devices.
Apple's July earnings release reported June-quarter revenue of $109.4 billion, up 16%. Reuters' July 30 coverage put management's September-quarter revenue growth guidance at 9%11%, with supply and currency constraints weighing on the outlook. That midpoint implies a six-percentage-point slowdown from June's growth rate. The key question is what drove the moderation: limited availability, softer demand, or a combination of both. June's revenue provides context, while September's year-earlier results supply the relevant comparison.
The valuation leaves Apple with plenty to prove. GuruFocus shows a GF Score of 95 out of 100, with profitability and growth standing out, while financial strength and ...