Apple Earnings Preview

Apple will deliver another blowout quarter led by the sales of the newly launched iPad and iPhone 4.

Apple (AAPL: 459.68 +1.00%) is expected to report their fiscal third quarter 2010 results after the market closes on Tuesday, July 20.

Apple is renowned for providing financial guidance that is well-below what they actually expect to deliver. Last quarter, the technology giant reported earnings results that were $.88 above Wall Street’s consensus estimates. AAPL shares jumped 6% following the strong earnings announcement.

The current Wall Street consensus estimates are for revenues of $14.62 billion and EPS of $3.07. This would imply a phenomenal 75% increase in revenues over last year’s $8.34 billion. Analysts expect net earnings to soar by 53%. 

Apple shares have gained 20% this year and have easily outpaced the 3% decline in the S&P 500 index. Last year, AAPL shares gained 147% and easily outperformed the 23% gain in the S&P 500.

Apple stock is currently trading at only 15x consensus 2011 EPS estimates. It’s very likely that Apple will deliver another blowout quarter given the early reports of iPad and iPhone 4 sales. Apple shares continue to trade at a very attractive valuation given their phenomenal growth rate.

At the time this article was published, the author held a financial position in Apple.