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Apple, Inc. Earnings: Mark Your Calendar

By Daniel Sparks - Oct 5, 2017 at 10:03AM

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Investors will look for more evidence that the tech giant can sustain its recent return to growth.

Tech giant Apple (AAPL 1.62%) just put a date on its fiscal 2017 fourth-quarter earnings release. On Thursday, Nov. 2, after market close, Apple will update investors on its latest quarterly results.

While Apple has pulled back 6% in the past month, relieving some pressure ahead of the world's most valuable company's earnings report, the stock is still up a notable 33% year to date. When Apple reports its quarterly results, investors will be looking for the company to repeat some of the same strong growth it reported in the third quarter.

Apple Store with trees and pedestrians in front.

Image source: Apple.

Here's an early look at some of the areas investors will want to watch when Apple reports its fourth-quarter results.

Will a later iPhone X launch impact results?

One concern after Apple's iPhone X unveiling was the timing of the phone's launch. While it was introduced in September, the device isn't supposed to begin shipping until November -- more than a month after Apple's new flagship iPhones usually start shipping to customers. This has led some analysts to believe that Apple could have trouble living up to its guidance for revenue growth in Q4. For its fourth quarter, Apple said it expected revenue between $49 billion and $52 billion -- up 4.5% to 10.9% year over year.

Of course, Apple did have its just-launched iPhone 8 and 8 Plus to help with iPhone sales in the last few weeks of its fiscal fourth quarter. The new iPhones were available beginning Sept. 22, which was in line with Apple's usual iPhone launches. But many consumers interested in buying a new iPhone are expected to hold out to buy the flagship iPhone X.

A man holds two new iPhone 8 smartphones in their boxes

Investors will look to iPhone 8 to help drive some growth at the end of Apple's fourth quarter. Image source: Apple.

Nevertheless, Apple CEO Tim Cook said he was "thrilled" with the consumer response on the launch weekend of the iPhone, suggesting the company may have been on track to ship enough units to live up to its guidance.

Checking in on services

One area of Apple's business worth watching closely is its fast-growing services segment. Thanks to strong double-digit growth recently, services has become Apple's second-largest segment.

In Apple's third quarter, services revenue climbed 22% year over year, accounting for 16% of Apple's total revenue. This trumped Mac and iPad, which accounted for 12% and 11% of third-quarter revenue, respectively.

Apple's services segment, which includes revenue from the App Store, iTunes, AppleCare, Apple Music, Apple Pay, licensing, and other services, is integral to the company's long-term potential. The segment not only offers strong growth prospects, but it's also more predictable than Apple's more volatile product revenue.

Look for strong double-digit growth from this segment in Apple's fourth quarter.

Guidance is key

Investors will undoubtedly turn their attention to Apple's guidance for its important first fiscal quarter of 2018. Not only will the iPhone X be released during this quarter, but the period also encapsulates the holiday season.

iPhone X being splashed by water

iPhone X. Image source: Apple.

For Apple to outperform its results in its first fiscal quarter of 2017, it will need to guide for first-quarter revenue of $78.4 billion.

Overall, investors will be looking for Apple to demonstrate an ability to sustain its recent return to growth. After the stock's strong year-to-date run-up, Apple is no longer priced for flat performance.

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