With a $755 billion market cap and products that inspire throngs of devoted fans, Apple is pretty accustomed to being the center of attention. But when the tech giant reports its earnings results Tuesday afternoon, it could draw extra scrutiny from members of its own cohort, entirely because of the influence it can yield: according to one analysis, Apple's earnings results have the ability to determine whether or not the information technology sector as a whole reports a second quarter earnings gain -- or a second quarter earnings loss.
Wall Street analysts expect Apple to report $1.80 in second quarter earnings per share. The "whisper number" compiled by analyst John Scherr is even higher at $1.83 per share; this is because, in the 68 earnings reports for which Scherr has data, Apple has come in above estimates 48 times.
But if Apple fails to match the whisper number yet manages to meet or beat the Wall Street consensus, its earnings will be a boon to the IT sector -- more so than even Google, Intel, IBM or Netflix, four tech giants that have all reported second quarter earnings beats. According to FactSet analyst John Butters, earnings at or above $1.80 per share will make Apple the largest contributor to the S&P technology sector for the fourth quarter in a row.
"The blended earnings growth rate (which combines actual results for companies that have reported and estimated results for companies yet to report) for the Information Technology sector is 0.2%," Butters writes. "Excluding Apple, the sector would report a year-over-year decline in earnings of 6%."
Here's a look at how Apple has influenced S&P tech earnings for the last nine quarters:
Butters notes that one of the reasons Apple has managed to be such an earnings juggernaut is strength in its iPhone segment: the unit has posted 50% (or greater) revenue growth in the last two quarters and is projected to report 51% growth Tuesday afternoon. However, he warns, that growth may not last through the year -- by the fourth quarter of 2015, iPhone sales are expected to drop 3.4%.
It's worth noting that while earnings season has only just begun, the results from other IT companies have hardly been busts thus far. Last week, Google reported $6.99 in earnings per share, easily topping the $6.70 Street consensus. Netflix earnings came in one penny above Wall Street expectations and Intel earnings beat by five cents per share. IBM, meanwhile, posted $3.84 in earnings per share Monday afternoon, beating the $3.78 consensus.
