Apple (AAPL) will report first quarter FY22 earnings tonight after the close. There is a conference call scheduled for 5pm ET.

Q1 Capital IQ consensus calls for EPS of $1.89 versus $1.69 last year on revenue of $118.5 bln (+6% yr/yr). The Street is expecting Q1 gross margins of 41.6% versus 39.8% last year.

Apple has not provided exact guidance since the pandemic began.

Q2 Capital IQ consensus is looking for EPS of $1.32 and revenues of $90.2 bln. The Street is expecting Q2 gross margins of 42.1%.

Segments:

• Expected Q1 iPhone revenue sits at $67.5 bln vs. $65.6 bln last year,

• Mac revenue of $9.5 bln versus $8.7 bln last year,

• iPad revenue of $7.8 bln vs. $8.4 bln last year, wearables revenue of $14.0 bln versus $13.0 bln last year,

• Services revenue of $19.7 bln versus $15.8 bln last year.

Last quarter's main challenge was larger than expected supply constraints. Investors will watch closely to see if any of these issues have softened. This should be a bellwether quarter for semi’s and the supply chain.

TECHS:

AAPL has a $2.61 trillion valuation and currently trades at 28 times FY22 earnings.

Based on this weeks AAPL Jan28 $160 straddle, the options market is currently pricing in a move of ~5% in either direction by weekly expiration (Friday).

Suppliers to Watch:

SWKS, CRUS, AVGO, QRVO, TSM, and QCOM, among others (SMH); SSNLF, LPL (for displays) and LITE, and IIVI (for FaceID).

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