Apple’s AAPL) report for its fiscal second quarter will be under a microscope tomorrow, Thursday, April 30.
Beyond the strong quarterly results analysts expect from Apple’s growing services business and demand for its AI-powered iPhone 17s and M5-based MacBook, Wall Street will be looking for insight on the tech giant’s leadership transition.
This comes as longtime CEO Tim Cook announced last month that he will retire in September and be replaced by John Ternus, Apple’s SVP of Hardware Engineering and a 25-year veteran of the company.
Ternus joined Apple in 2001, rising through the hardware division and contributing to major product lines including the iPad, AirPods, and multiple generations of iPhones, MacBooks, and Apple Watches.
Going forward, Tim Cook will serve as Executive Chairman of the Board, and the somewhat sudden leadership change has investors thinking Apple could deliver a blowout Q2 report.
Apple’s Q2 Expectations
Based on Zacks estimates, Apple’s Q2 sales are thought to have increased nearly 15% year over year to $109.48 billion versus $95.36 billion in the comparative quarter. Apple Services revenue is expected to increase 14% YoY to more than $30 billion, with Products revenue expected to increase 15% to over $79 billion.
On the bottom line, Apple’s Q2 EPS is expected to be up 16% to $1.92 compared to $1.65 per share a year ago.
Notably, Apple has exceeded top and bottom line expectations for 12 consecutive quarters. Over the last four quarters, Apple has posted an average sales and EPS surprise of 3.12% and 6.79%, respectively.
Image Source: Zacks Investment Research
The Zacks ESP
It’s noteworthy that the Zacks ESP (Expected Surprise Prediction) indicates Apple could end its streak of beating earnings expectations with the Most Accurate and recent estimate among Wall Street analysts having Q2 EPS slated at $1.90 and 0.75% beneath the underlying Zacks Consensus (Current Qtr below).
Image Source: Zacks Investment Research
Tracking the Trend of EPS Revisions
In the last 30 days, Apple’s FY26 EPS estimates have risen 1% from $8.43 to $8.52. Notably, the Q2 EPS consensus is up from $1.89 a month ago to the current expectations of $1.92, with Q3 EPS estimates rising 3% from $1.70 to $1.75.
Despite the positive trend for FY26, Apple’s FY27 EPS revisions are slightly down over the last 30 days from $9.34 to $9.32.
Image Source: Zacks Investment Research
Still, Apple’s EPS is now expected to increase 14% this year and is projected to rise another 9% in FY27.
Image Source: Zacks Investment Research
Bottom Line
Investors are certainly on edge for Apple’s Q2 report and guidance that hopefully gives more insight into why now is the time for Tim Cook to step aside as CEO and have John Ternus take over.
Apple’s strong reporting history and updated product lines are reasons to be optimistic in regards to blowout Q2 results being in the cards, although the Zack ESP suggests its streak of beating EPS expectations could come to an end. For now, Apple stock lands a Zacks Rank #3 (Hold).
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
Apple Inc. (AAPL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
