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

SPCE: Huge Short Opportunity
SPCE: Huge Short Opportunity

What happened? Sir Richard Branson risks losing his grip on Virgin Galactic as he continues to sell down his stake in the space tourism venture to fund his pandemic-hit businesses…

Amazon Earnings Disappoint
Amazon Earnings Disappoint

Shares declined by about 7% in the extended trading after the results were released. It marked the first time Amazon had missed quarterly sales estimates since 2018.

Latest news

3 Forex Pairs to Trade Right Now
3 Forex Pairs to Trade Right Now

The year started only a couple of weeks ago, but we already have a lot of fascinating movements in various trading instruments. To help you in trading, we choose several forex pairs that may surprise you and plunge greatly in a short period. 

Are Banks the Next Rally Participants?
Are Banks the Next Rally Participants?

For a long time, US Federal Reserve printed trillions of dollars to support the economy. But in the light of the highest inflation in almost 40 years, the stream of stimulus tends to shrink.

Deposit with your local payment systems

Be on top of your game

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!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

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