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Ex-Apple, Technology Sector Will Report a Decline in Earnings for Q2

By John Butters, Senior Earnings Analyst
Jul 17, 2015

Apple will be a focus company for the market during the upcoming week, as the company is scheduled to report earnings for the second quarter on July 21. The current mean EPS estimate for the company for Q2 2015 is $1.80, compared to year-ago actual EPS of $1.28.

Apple is expected to be the largest contributor to earnings growth for the Information Technology sector for Q2 2015. 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 0.2%. Excluding Apple, the sector would report a year-over-year decline in earnings of 6.0%. 

If Apple reports actual EPS equal to or above the mean EPS estimate, this will mark the fourth consecutive quarter that Apple has been the largest contributor to earnings growth for the Information Technology sector.

What is driving Apple's substantial contribution to earnings growth for the Information Technology sector in recent quarters? The iPhone product segment has reported revenue growth in excess of 50% in the previous two quarters, and is projected to report revenue growth of 51% in Q2 2015. However, year-over-year comparisons for iPhone sales become more challenging in Q4 2015.

Unlike the first three quarters of the year, the exclusion of Apple from the Information Technology sector is not predicted to cause a substantial decline in year-over-year earnings growth for the sector in the fourth quarter.

Read more about earnings trends in this edition of FactSet Earnings Insight. Visit www.factset.com/earningsinsight to launch the latest report.

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