Apple Earnings Preview

Moneybox
A blog about business and economics.
April 23 2013 1:13 PM

Three Things to Watch for When Apple Reports Its Earnings

154620720
Apple CEO Tim Cook poses with an iPad Mini

Photo by KIMIHIRO HOSHINO/AFP/Getty Images

Today is quarterly earnings day for Apple, and a lot of eyes will be on what's now been reduced to America's second largest company. I'll be watching with interest for three things.

One, though it sounds dumb, is simply how much extra cash did Apple add. There's going to be a lot of emphasis on growth rates in the coverage, but for a company whose profits were already so high the absolute level matters a lot. The value of Apple's cash on hand is already very high relative to its market capitalization and every extra dollar impacts that ratio regardless of growth rates.

The second is Mac sales. This isn't so important to Apple has a company but it's important to how we understand the overall state of the PC market. Aggregate sales are falling. Is Mac doing about average in that context, in which case the PC's decline is about the decline of the PC, or is Mac doing above-average in which case the PC's decline is in large part specifically about Windows 8? This swathe of Apple's earnings is going to tell us a lot about other companies, in other words.

Advertisement

The third is, of course, market reaction. Market prices are all about expectations. Apple's PE ratio is already low, meaning there was already an expectation of bad things happening in the future. More interesting than whether the share price goes up or down in response to the news is what happens to the multiple. Do investors get more optimistic or more pessimistic about the future of the company?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
  Business
Moneybox
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
  Life
Outward
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
  Technology
Technocracy
Oct. 20 2014 11:36 PM Forget Oculus Rift This $25 cardboard box turns your phone into an incredibly fun virtual-reality experience.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.