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Apple is the eye of technology sector earnings again

By John Butters, Senior Earnings Analyst
Jan 26, 2015

Apple will be a focus company for the market during the upcoming week, as the company is scheduled to report earnings for the fourth quarter on January 27. The current mean EPS estimate for Q4 2014 is $2.59, compared to year-ago actual EPS of $2.07.

Apple is expected to be the largest contributor to earnings growth for the Information Technology sector for Q4 2014. The blended earnings growth rate (combines actual results for companies that have reported and estimated results for companies yet to report) for the Information Technology sector is 3.8%. Excluding Apple, the blended earnings growth rate for the sector falls to 0.1%. 

If Apple reports actual EPS equal to or above the mean EPS estimate, this will mark the 2nd consecutive quarter that Apple has been the largest contributor to earnings growth for the Information Technology sector. It will also mark the third time in the past four quarters that Apple has been a positive contributor to earnings growth for the sector. These results mark a sharp contrast to 2013, when Apple was a detractor to earnings growth for the Information Technology sector for all four quarters. 

Looking ahead to 2015, Apple is also expected to be the largest contributor to earnings growth for the Information Technology sector. The estimated earnings growth rate for the Information Technology sector for 2015 is 9.9%. If Apple is excluded, the estimated earnings growth rate for the sector would drop to 8.1%.

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