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Apple Needs More Exceptional Profit Than Usual: Chart of the Day

Apple Inc. needs to surpass earnings estimates by a wider margin than most of its peers in the Standard & Poor’s 500 Index to satisfy investors, if history is any guide.

The CHART OF THE DAY shows the percentage gap between adjusted earnings per share at the maker of iPhones and iPads and analysts’ average projection in Bloomberg surveys for each calendar quarter since 2005. Apple uses a fiscal year that ends in September.

Per-share adjusted profits beat estimates by about 19 percent on average in the seven-year period, according to data compiled by Bloomberg. Apple’s fiscal second-quarter earnings will have to surpass the average estimate, $9.98 a share, by 20 percent or more to cross that threshold.

“Apple needs to smash records to keep momentum,” Colin Gillis, an analyst at BGC Partners LP, wrote yesterday in a report. He predicted earnings of $11.05 a share. The New York-based analyst has a hold recommendation on the stock, based on the projected 12-month return after adjusting for risk.

One of every nine S&P 500 companies posting earnings for the latest quarter beat estimates by 20 percent or more, based on Bloomberg data through yesterday. Advanced Micro Devices Inc. and Yahoo! Inc. were the only technology companies to do so.

Shares of Apple, based in Cupertino, California, fell nine times on the day after earnings reports in the last 28 quarters. Six of those losses were recorded when the spread was narrower than the average, and a seventh occurred after earnings beat estimates by 19.1 percent.

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