Will Apple Inc. (NASDAQ: AAPL)’s Q3 Earnings Live Up To Expectations?

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Apple Inc. (NASDAQ: AAPL) will release its third quarter reports for the 2014 fiscal year. By the 5 p.m EST today, investors will know whether or not Apple will have met their high expectations.

For the past three months, the company’s stock has risen 24%. However, there are factors beyond the usual figures and metrics – such as sales, revenue, EPC, etc – that could influence the stock and investors’ sentiments towards it.

Apple CEO will be expected to answer the following questions in the Q3 report.

iwatch9New Products?

On several occasions, Cook has confirmed rumors that Apple would be releasing brand new products in completely new categories. For the past few months, inside sources as well as spokespeople for the company have suggested that these new products are going to hit the market soon.

Cook said in an interview with the Wall Street Journal that “The day Apple launches its products in new categories is closer than its ever been.”

As fall – the time of year when Apple debuts its new products – nears, many investors want confirmation that Apple’s new products are ready to be released. The company seems to be on track to increase EPS with iPhone sales and continuing repurchasing shares. By breaking into an entirely new category, Apple could also gain more growth in revenue. Given the company’s track record, this prediction will not be far from the truth.

Tim Cook has been repeatedly dropping hints of the release of a smartwatch or a payment system. The payment system, according to rumors, will let users add money directly into their iTunes account, bypassing the middle step of purchasing an iTunes gift card.

Potential growth of market?

Apple will need to address investors’ concerns about the growth potential of these new markets. Does the company have high expectations for the smartwatch and the payment system? Will these new products cannibalize Apple’s earnings? Or will they provide additional revenue for the tech company?

iphone6concept4Supply Limitations For the iPhone?

In the past, Apple’s iPhones has always experienced supply constraints during their initial release period. The exception to this trend was the release of the iPhone 5C last year, which was the first iPhone model to be available in excess in multiple markets. However, the supply of the iPhone 5S was severely restrained during its initial release. For the iPhone 6, consumers and investors can expect some supply limitations in the first few months. Any limitations in supply beyond that could point at a possible bottlenecking move for the iPhone 6.

Given the fast growing cut throat competition for smartphones, avoiding supply constraints for the iPhone is more important than ever. Having a plentiful supply of iPhones will aid Apple in taking as much of the initial demand as possible, and decrease the risk of losing potential iPhone buyers due to wait times.

So in the third quarter earnings report due to be released later today, investors will be looking to have these three concerns addressed: the launch of new products, the potential growth in the market, and the release of the new iPhone 6.

 

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