Apple Stock Betting on Earnings Beat

Odds are good that Apple will beat analysts' earnings estimates and continue its record breaking move higher, once it reports after Tuesday's closing bell.

But the odds are also good that Apple shares will trade lower on Wednesday, even if it surpasses expectations, according to Birinyi Associates' research.

Birinyi analyst Kevin Pleines points out in a note that Apple has beaten EPS expectations every quarter since 2004. Analysts expect Apple to earn $5.86 per share, a 67 percent increase over last year.

Apple stock closed at a record $373.80 Monday, and continued to move higher Tuesday. Pleines also points out that 71 percent of the time, Apple moves higher from the close to the open the next morning, for an average gain of 2.8 percent.

But the stock has also traded lower from the open to the close on the next day 65 percent of the time, for an average loss of about a half percent. Apple management also rarely gives forward guidance above expectations, and it is notorious for guiding conservatively.

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