2 Bullish News Bites Leading Up to Apple Inc's Q3 Earnings

Apple's iPhone 5s is outpacing the competition and could result in a great fiscal Q3 for the company.

Jul 8, 2014 at 5:00PM

The iPhone 5s is outpacing the competition according to ABI Research. Source: Apple.

We're still a couple of weeks away from Apple's (NASDAQ:AAPL) fiscal Q3 2014 earnings report, but that hasn't stopped some preliminary good news from surfacing for the iPhone maker. Let's take a quick look at the two things that Apple investors should be happy with leading up to the July 22 earnings report.

Abi Research Apple

Source: ABI Research.

iPhone still on top
ABI Research just released data this week showing the 16GB iPhone 5s was the most popular smartphone in calendar Q1 2014. The rankings include the top 20 smartphones, with the 5s taking the top spot and the 8GB iPhone 4S taking No. 5. Not surprisingly, Samsung's Galaxy lineup filled in the gap between the two.

While the iPhone 5s boasted some significant new features, like Touch ID, it wasn't a complete redesign of the iPhone 5. This is significant as Apple is expected to completely revamp its iPhone lineup this fall, with the launch of a 4.7-inch and possibly 5.5-inch iPhones.

Considering the iPhone 5s' success, it's not unrealistic to think the redesigned iPhone 6 models -- with larger form factors and new features -- could continue that trend.

How the analysts see it
ABI's data isn't the only indicator the iPhone was finding its way into consumers' hands. Tech Trader Daily reported this week that Pacific Crest's Apple analyst, Andy Hargreaves, raised his fiscal Q3 iPhone sales estimates from 35 million up to 36 million, and increased full-year 2015 iPhone estimates from 175 million to 191 million.

The increase comes partially as Hargreaves believes the strong-selling iPhone 4S will be phased out soon to make room for the newer devices -- including, what he believes, will be a $299 on contract iPhone with 5.5-inch display.

Those estimates come as Horace Dediu, from Asymco, thinks Apple will outpace its revenue and hit $38.6 million for the quarter, with iPhone sales at 33.7 million.

Here's the tweet with his estimates:

Though all this information could be good, there's obviously more Apple investors need to consider.

Foolish takeaway
First of all, we need to remember that quarterly earnings are just a snapshot of a company's larger financial picture. So if the earnings are a snapshot, then the analyst estimates of earnings are just are a blurred perspective of that snapshot. That's not to say they aren't helpful, but making long-term investing decisions based on them isn't the best strategy.

But the ABI Research combined with the analyst notes do point to a larger trend of solid iPhone sales for calendar Q1 2014, and that should be good news for investors. As Apple readies a larger iPhone (or two) the strong-selling iPhone 5s will continue to bring in long-tail revenue for the company even if it's replaced by newer models. Considering how well the iPhone 4S is still selling for Apple, it's clear the company still has years to benefit from its current flagship device.

There's much more to Apple's next device
Apple is getting ready to launch its first wearable device, but one small company is making Apple's gadget possible -- and it's time for investors to take notice. This company's technology is inside some of the world's newest wearable devices, and it still has room for growth. To learn more about investing in wearables, and to find out about this one stock, just click here!

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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