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The AAPL Effect: Q4 Earnings Growth Without Apple: 0%; With Apple: 2.1%
Yesterday we commented on the outsized macro impact that one company already excerts on the world, when we reported that in the fourth quarter, a whopping 60% of retail sales growth was due to the launch of Apple's iPhone 6 in the fall of 2014, and the surge of Chinese tourists who tok advantage of Hong Kong's lower prices and earlier release. So how about the micro level?
For the answer we present the chart below. Behold: the AAPL effect, which demonstrates that what until AAPL's release was shaping up to be a flat Q4 earnings season for the S&P 500, has since transformed into Q4 EPS growth of 2.1%, and made Apple the largest contributor to earnings growth for the S&P 500 at the company level for the fourth quarter. All this, thanks to just one company!
Factset's take on this dramatic, outsized impact :
During the past week, the blended earnings growth rate for the S&P 500 for Q4 2014 increased to 2.1% today from 0.2% last Friday. The dollar-level earnings for the index rose by $5.0 billion over this period (to $273.8 billion today from $268.8 billion last Friday). What caused the increase in dollar-level earnings for the index this past week?
At the sector level, the Information Technology sector witnessed the largest increase in dollar-level earnings of all ten sectors over the past week, as the dollar-level earnings for the sector rose by $3.1 billion over this period.
At the company level within the Information Technology sector, Apple was the largest contributor not only to the increase in dollar-level earnings for the Information Technology sector, but also to the increase for the S&P 500 index as a whole. On January 27, Apple reported actual EPS of $3.06 for Q4 2014, which was 17.5% above the mean EPS estimate of $2.60. Due to the magnitude of the surprise and the company’s weight in the index, Apple accounted for just over 2.5 billion (or 51%) of the $5.0 billion increase in earnings for the S&P 500 index over the past week. If Apple had reported actual EPS that matched the mean EPS estimate, the blended earnings growth today would be 1.1% rather than 2.1%.
As a result of the upside earning surprise, Apple is now the largest contributor to earnings growth for the S&P 500 at the company level for the fourth quarter. If Apple is excluded, the blended earnings growth rate for the S&P 500 for Q4 2014 would drop to 0.3% from 2.1%.
In light of these facts, one can only hope that Apple's growth, which many sellside analysts have already pegged will result in the first $1 trillion market cap, continues without a hitch in perpetuity, as it now appears that even the slightest deviation from "priced to perfection" growth of just this one company will result in not only an economic recession or worse, but an S&P earnings and market crash too.
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like I said we might need QE4 and now maybe QE5 for this farce to continue
Apple :$1k phone to be spied on lol
QE4 my cunt!
Speaking of MY...
MY 10-GSPS (Gallons of Shit Per Second) fan is ready.
Could somebody, please, press the “Shit” button? ;-)
Looney
Problem: The oil price effect the next few quarters.
Solution: Remove all oil companies from major averages on temporary basis due to anomolies and unacceptable GAPP accounting results
Yeah, well...energy prices collapse....does that mean prices for food etc have collapsed?
Nooooooooo....
So somebody is making a fortune here...
Tyler, is that GAAP or Pro forma EPS growth being flat sans APPL?
My iPod nano was FedEx'd straight to me from China. And I specified standard delivery. Apple is making some good money on their products. It's too bad that the federal government (EPA, HHS, OSHA, IRS, NRLB, and on, and on) is forcing so many companies to move overseas or go out of business.
we appled some folks..
9/11 Truth: The NIST “no molten metal” guy posing by steel with unexplained melting (PHOTOS)
Also that 2.1% actually comes from Chnia rather than domestic US revenue
It counts for the BEA, but not for the IRS.
60% of Hong Kong retail sales were for NSA i6's.
http://www.zerohedge.com/news/2015-01-30/60-retail-sales-growth-hong-kon...
Thank You Tyler. Not one MSM site reported "sector volumes/sales" Stay away from overloaded servers my friend.
I hear that 100% of the profits at a whore house are the result of pussy.
Nope- mouths get involved also.
nothing like a nice piece of anus. . . . so says bathhouse barry anyway.
Chinese slave labourers are the new niggers.
Congrats, Apple for bringing back slavery. Every I-crap user is thanking you tremendously.
It's so worth it! Paying $700 for a gadget that costs $15 bucks to make! Brilliant markup and excellent strategy. Why can't we all have niggers do the work for us and profit?
Ummm american middle class are the new niggers bud, we pay for each end of the economic spectrum to ignore and fuck us daily.
More than fucking HALF and that was a goddamn smartphone. At least General Dynamics makes shit like power plants and jet engines.
Fuck!!
But college age girls in Your Town won't bang you in return for a power plant or jet engine.
Made in China - sold in China... doesn't mean a &#(@ thing. I'd wager most units were upgrades, so yet another stick save was a one-off. There is absolutely no good news that can be extrapolated out as a trend to account for the Fed's 'LIFT-OFF'... Unless they were referring to the lift-off in stupidity of the powers that be.
What we all need is two phones.... one that "takes a call" and one to "hang up".
Boom...... instant doubling of GDP.
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight...
From the same report:
"Highest Percentage of Companies Beating EPS Estimates (80%) Since Q1 2010 (81%)"
So did apple post a profit? Or was it all discount sales?
What's the problem? Next quarter they can just backspace the 6, type in a 7, release to manufacturing, and a whole world of idiots will pay them another $600 for an iPhone 7, because only losers will still have an iPhone 6.
A bet against Apple is a bet against human vanity, because they are expert manipulators of it..
The only phone I'd pay that kind of money for would be one impervious to NSA and all the rest of those fuckers listeninbg in on and tracking. It would not have to be able to take pictures, run apps, connect to the internet, or any of that shit. Just a telephone to make calls that could not be monitored or have its postion tracked.
Fat chance.
Sounds suspicious to me.
It’s true, the recovery and the American economy, along with the lies, walks the tight rope without a net.
Not only does the equities market depend on Apple sales, and not only does it depend on iPhone revenue (70% of Apple revenue according to MarketWatch), it now depends on iPhone surging sales in China. Conclusion: The American economy watches carefully as the Chinese visit the Apple stores.
Incredible. One product supports the US recovery, and guess what, that one product’s in China.
GE brings good things to life. like a fucking radioactive OCEAN. You try that on your own. Shiittttt
Apple expanded its business by selling into China - no mention of channel stuffing with phones - that won't come out until Q2 - fun and games for everyone - ONWARD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!