Apple is due to report earnings today after the close. Here is how I quickly gauge the probability of a negative surprise:
Since earnings come from sales, a first sign of a weak report would be the annual rate of growth of quarterly sales slowing considerably. In the table above the red numbers are the latest sales estimates from Yahoo Finance. The purple ones are the year ago figures.
The rate for q4 this fiscal year (53.6%) is roughly equal to the one from last year (54,6%) suggesting that there is no reason to expect a bad report. The same holds true for q1 of the next fiscal year (green rectangle).
These estimates are available long before the day of the actual earnings release. Thus, a portfolio can be built in anticipation, centered on the stocks that have good odds of meeting or beating their estimates.
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