Better than Expected Earnings, Stocks Lower! How?

Better than Expected Earnings, Stocks Lower! How?

2021-07-28 • Updated

Since the beginning of the earnings season, companies are posting record earnings, most sectors have so far beaten the estimates by a large margin. However, stocks reacted differently. Look at Apple, for example. EPS came in at $1.30 vs. $1.01 estimated and Q3 revenue posted $81.4B vs. $73.82 expected. Everything came in much better than expected, including iPhone, wearables, home & accessories, Ipad, Mac, and services. Apple has $194 billion in cash and marketable securities. Net cash was $72 billion, after deducting debt.

Despite all this, Apple stock declined to 142.60 after hours. Here there might be two main reasons for such declines (not only for Apple but most of the companies since the beginning of the earnings season):

  • Apple decided not to publish earnings guidance.
  • The market is looking for something new to be excited about.

However, the current decline is considered as another round of profit-taking after the board declared a cash dividend of $0.22/share. Therefore, I would consider the current decline as a price discount and would consider buying Apple shares in the medium term starting at $140 all the way down to $135.

Apple.png

TRADE NOW

Similar

Key Moment For The US Stock Market
Key Moment For The US Stock Market

For the third time in a row, Apple reports a dip in sales as it releases its report for Q2 2023. The announcement led to a 7% drop in stock prices as more investors seemed to lose confidence in the stock’s performance.

What to trade on May 9-13?
What to trade on May 9-13?

It was an intense week across all the markets! We saw decent movements of major pairs, gas, stock indices, and oil prices. What should we trade this week? Time to check!

Latest news

USD: Powell Speaks on Cutting Interest Rates
USD: Powell Speaks on Cutting Interest Rates

Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...

WTT: Currency Pairs To Trade In April
WTT: Currency Pairs To Trade In April

Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera