Bullish on Apple Inc.(AAPL)? Here’s What to Look for in Earnings Report

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July 23, 2013 9:51am NASDAQ:QQQQ

apple-computerJust nine months ago Apple Inc.(NASDAQ:AAPL) stock surpassed $700 a share. This high was driven by the release of the iPhone 5, the promise of exciting new products, and investors who were convinced the company could do no

wrong. Heading into tonight’s quarterly report, Apple is trading under $430 a share, the new products haven’t arrived, and investors are convinced the company is incapable of doing much of anything — at least under current management.

Analysts expect Apple to report $7.31 per share on revenues of $35.1 billion compared to $9.32 per share on $35 billion in the same quarter last year. Scott Kessler of S&P Capital IQ has a Strong Buyon Apple with a $550 price target. In the attached clip Kessler says he wants to see two things from Apple tonight.

The first is that the company is getting a grip on those collapsing net margins. “If they indicate that gross margins won’t deteriorate much further from the June quarter to the September quarter, I think that would be construed as a positive,” Kessler offers, doing a nice job illustrating just how badly Apple’s reputation and operations have been tarnished over the last year.

The second is regarding product release methods and dates. If there’s a defining characteristic of CEO Tim Cook’s tenure at Apple — other than the falling stock price — it’s the company’s coquettish approach to new product releases. Grown-up companies announce product release dates and are judged on their ability to meet those schedules by delivering quality product.

You can see the full “Breakout” segment below:

Related: PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ)

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