Story corrected to reflect Apple will report fiscal third-quarter earnings, not second-quarter results.
BOSTON (TheStreet Ratings) -- Apple(AAPL) is scheduled to report fiscal third-quarter earnings after the market close on July 19, and the company's report is expected to show its red-hot growth in sales and earnings continued in the quarter.
Analysts are expecting the computer and personal device maker to report earnings per share of $5.73, up from $3.51 reported a year earlier. Revenue is estimated to increase 58% to $24.8 billion from $15.7 billion based on expectations for improving iPad and iPhone sales.
The following is taken from a first-quarter report published by TheStreet Ratings, an independent-research unit of TheStreet that uses a quantitative model to evaluate stocks.
Apple reported significant earnings per share improvement in the first quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Apple increased its bottom line by earning $15.15 versus $9.07 in the prior year. This year, the market expects an improvement in earnings ($24.92 versus $15.15).
We rate Apple a "buy." This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. Our model maintains a price target of $470 on shares of Apple, indicating the potential for 31% upside from current levels.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Computers & Peripherals industry and the overall market, Apple's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
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