Earnings preview: Wall Street expects 37M iPhones, 12M iPads sold by Apple in Sept. quarter
Apple is set to report the results of its September quarter later this afternoon, including the first few weeks of iPhone 6 and iPhone 6 Plus sales, and market watchers generally expect the company will report revenue of around $40 billion for the three-month period.
Analyst Gene Munster of Piper Jaffray issued a note to investors on Monday in which he summarized Wall Street expectations for the quarter. Apple already provided guidance of between $37 billion and $40 billion in revenue for the September frame, and investors generally expect the company took in $40 billion or more.
However, Munster believes it is unlikely that Apple will post revenue significantly ahead of the $40 billion at the high end of its guidance. In his view, if Apple's sales were meaningfully ahead of $40 billion, they would have revised guidance following the opening weekend of iPhone 6 and iPhone 6 Plus sales.
That's exactly what Apple did last year following the launch of the iPhone 5s and iPhone 5c, pushing its gross margin guidance higher a month before earnings were reported.
As for this year's iPhone sales, market watchers generally expect Apple to report shipments of between 37 million and 38 million units for the quarter. That would represent 10 percent year over year growth, slightly lower than the 13 percent annual growth the company posted in its June 2014 quarter.
As for the iPad, Wall Street expects shipments of 12 million units, down 15 percent year over year. Mac sales are expected to have grown 1 percent to 4.6 million, while gross margin expectations are pegged at 37.5 percent.
Looking forward to the December quarter, Munster expects Apple will guide revenue to between $65 billion and $68 billion, with gross margins between 38 and 38.5 percent. Wall Street expects that Apple's margins will see a boost from the launch of the iPhone 6 and iPhone 6 Plus, with higher capacity offerings incentivizing upsells.
While Apple doesn't guide sales of products, investors expect Apple will sell about 60 million iPhone units in the holiday quarter, which would be a new all-time record.
Piper Jaffray has reiterated its "overweight" rating for AAPL stock with a price target of $120.
Analyst Gene Munster of Piper Jaffray issued a note to investors on Monday in which he summarized Wall Street expectations for the quarter. Apple already provided guidance of between $37 billion and $40 billion in revenue for the September frame, and investors generally expect the company took in $40 billion or more.
However, Munster believes it is unlikely that Apple will post revenue significantly ahead of the $40 billion at the high end of its guidance. In his view, if Apple's sales were meaningfully ahead of $40 billion, they would have revised guidance following the opening weekend of iPhone 6 and iPhone 6 Plus sales.
That's exactly what Apple did last year following the launch of the iPhone 5s and iPhone 5c, pushing its gross margin guidance higher a month before earnings were reported.
As for this year's iPhone sales, market watchers generally expect Apple to report shipments of between 37 million and 38 million units for the quarter. That would represent 10 percent year over year growth, slightly lower than the 13 percent annual growth the company posted in its June 2014 quarter.
Wall Street expects shipments of 37M-38M iPhones, 12M iPads, and 4.6M Macs for the September quarter.
As for the iPad, Wall Street expects shipments of 12 million units, down 15 percent year over year. Mac sales are expected to have grown 1 percent to 4.6 million, while gross margin expectations are pegged at 37.5 percent.
Looking forward to the December quarter, Munster expects Apple will guide revenue to between $65 billion and $68 billion, with gross margins between 38 and 38.5 percent. Wall Street expects that Apple's margins will see a boost from the launch of the iPhone 6 and iPhone 6 Plus, with higher capacity offerings incentivizing upsells.
While Apple doesn't guide sales of products, investors expect Apple will sell about 60 million iPhone units in the holiday quarter, which would be a new all-time record.
Piper Jaffray has reiterated its "overweight" rating for AAPL stock with a price target of $120.
Comments
Apple's FQ4 (the Septmber quarter) actually ended on September 27. Like most retailers, Apple always ends its quarter on a Saturday to avoid fluctuations due to weekend sales. That means there were only 9 days for which iPhone 6 & 6 were available. 10M have been sold on Sep 19. It will be interesting to see how many were sold in the remaining 8 days.
This should also mean that almost none of the iPhones sold to China would be included unless Apple is including reservations. It will be interesting to hear what Apple projects for the December quarter. iPhone 6 sales, including China and all the other countries should put the 37M to shame. Of course, none of this matters because AAPL will go down because some analyst has a bug up their *** and wants to short AAPL.
Of course, none of this matters because AAPL will go down because some analyst has a bug up their *** and wants to short AAPL.
Apple deserves to be punished, remember? They won't act the way these analysts predict.
This should also mean that almost none of the iPhones sold to China would be included unless Apple is including reservations.
Apple does not include pre-orders as sales. iPhone 6 sales to China are not part of last quarter. Q4 sales would include 9 days of sales to the twelve countries in the inaugural launch group, plus two days of sales from the 20+ countries from the second wave a week later.
As has been typical of late, Apple's guidance will be pretty solid and the analysts should be dismissed like the charlatans they are.
How true. Analysts never do anything that supports the growth of a company, they only worry about supporting themselves, which includes getting as much activity as they can to support their pocketbook. They haven't the faintest idea how any Apple products actually work or whether people actually use them. That's not their business. Their business is to buy and sell stock and all the other garbage allowed. The stock market is full of criminals and should be shut down, but of course, like oil companies, it can't because it would shut down the entire world. This is what we get for allowing gambling on this large of a scale.
"However, Munster believes it is unlikely that Apple will post revenue significantly ahead of the $40 billion at the high end of its guidance. In his view, if Apple's sales were meaningfully ahead of $40 billion, they would have revised guidance following the opening weekend of iPhone 6 and iPhone 6 Plus sales.
That's exactly what Apple did last year following the launch of the iPhone 5s and iPhone 5c, pushing its gross margin guidance higher a month before earnings were reported."
What about last quarter? Apple did not guide higher. Or the quarter before that.
What Apple did last Q4 was very unusual. Plus there is a new CFO now.
My estimate is $42B revenue.
40 million iPhones
iPad sales will surprise to the upside
And all shareholders will get a free iPad Air 2 and a $1000 dividend, right?
Apple never includes reservations, only sell through. No results from China can be expected from series 6 phone sales last quarter.
I think you're just mouthing every single thing you've heard the past several weeks, and that's not analysis at all.
as a stock owner, i'm fearful that the market will hate apple no matter how awesome they do.
At this point, you are in the point of diminishing returns. AAPL can't double in size again faster than the market (heck, it IS the market;-)
It's 'safer' to just invest 'carefully' with AAPL (limited growth, acceptable income), and get back into small/midcaps. and any index fund that doesn't have big investments 'against' AAPL;-)
Remember, Apple sells 1 tangible product (iPhone and don't own a 50+ percent market advantage), and arguably target only 25% of the human race. Everything is a halo off of that (people buy an iPhone, then a iPad, then a Mac or peripherals). Add a bad iOS or HW release, or 2, and it's a 2 years of bad returns.
And it's not a consumer/corporate necessity (think energy [fuel, utilities], HR resource outsourcing, food). Huge risk, compared to say, GE, Exxon, Walmart, even Google or Amazon (neither require a $700 purchase to generate primary revenue).
I check the Apple stores availablility of the iphone 6/6+ in Canada and the phones are still not in stock anywhere except for a few exceptions. Looks like demand is still a lot greater than supply. Looking good for EPS for the next quarter since iphone have big margins.
actually is AAPL +1,5% in regular trading, so i would expect opposite after results, based on my observations during last two years. So my bet is that AAPL will stay in $90-$100 range after results. I see declining ipad sales (more than -15%), supply constraints for new iphones, bendgate, weaker december guidance and strong dollar. And as i remember analysts and investors simply don't care if quarter has one more or less day YoY or if China is included or not, they just compare YoY and that is what matters. Ofcourse i can be wrong and you can laugh to me then
I predict the opposite of you, i.e. I predict the stock will continue to rise after the earnings report. Why? I actually don't expect the previous quarter's results to cause this rise, I predict that Apple's bullish projections for the current quarter will please Wall Street and we'll be above $100 tomorrow. Obviously time will tell, but it's not long now!
What's being ignored is the statement that Cook made during the last presentation, as well as the slide put up during that statement, when he said that sales of the new phone was much higher than last year's introduction. He said higher, and then went and said much higher.
So unless sales took a rather large, and last minute drop, we could see higher phone sales than expected. I'm expecting 38 million, or even a bit higher. 40 million could be possible, but that's a big number.
As for iPad sales, that's tough. I don't even know where to go with that, with the new models just now coming out.
Mac sales should be interesting. Even Gartner and IDC are estimating an 8-9% growth. We're seeing a 1% growth estimate here. That's a big discrepancy. Growth the last two quarters were 17 and 18%, so why the sudden drop?
Huge risk, compared to say, GE, Exxon, Walmart, even Google or Amazon (neither require a $700 purchase to generate primary revenue).
You know very little about how the companies you mentioned earn revenue, and apparently it is derived from walking the aisles at Home Depot than any real world knowledge. GE, for example, derives almost a quarter of its revenue from energy and aviation. An average GE aircraft engine lists at nearly 20 million. The nuclear power reactors that GE builds cost billions.
At this point, you are in the point of diminishing returns. AAPL can't double in size again faster than the market (heck, it IS the market;-)
It's 'safer' to just invest 'carefully' with AAPL (limited growth, acceptable income), and get back into small/midcaps. and any index fund that doesn't have big investments 'against' AAPL;-)
Remember, Apple sells 1 tangible product (iPhone and don't own a 50+ percent market advantage), and arguably target only 25% of the human race. Everything is a halo off of that (people buy an iPhone, then a iPad, then a Mac or peripherals). Add a bad iOS or HW release, or 2, and it's a 2 years of bad returns.
And it's not a consumer/corporate necessity (think energy [fuel, utilities], HR resource outsourcing, food). Huge risk, compared to say, GE, Exxon, Walmart, even Google or Amazon (neither require a $700 purchase to generate primary revenue).
Lets see, GE depends on huge government subsidies and tax breaks that could go away at any time, Exxon is in a volatile market at the moment with the price of crude plunging, Walmart's revenues have been declining YOY for some time, Google is an advertising company with a failing business model, and Amazon doesn't understand the concept of 'profit'.
Are you an analyst? It seems like it...
as a stock owner, i'm fearful that the market will hate apple no matter how awesome they do.
My guess is the focus will be more on Apple's guidance for the current quarter. In any case, I think 12 million iPads is high, since there was an expectation of a new iPad. I think iPad sales will be closer to 10 million. iPhone sales of 37 million seems right, since there were only 9 days in the fiscal quarter (9/19 - 9/27) in which the iPhone 6 and 6 Plus were on sale, and undoubtedly sales in August and early September dropped off in anticipation of the rollout. Even someone looking for a 5s would have held off for the price drop.
What's being ignored is the statement that Cook made during the last presentation, as well as the slide put up during that statement, when he said that sales of the new phone was much higher than last year's introduction. He said higher, and then went and said much higher.
So unless sales took a rather large, and last minute drop, we could see higher phone sales than expected. I'm expecting 38 million, or even a bit higher. 40 million could be possible, but that's a big number.
But there were only 9 days (9/19-9/27) in which the iPhone 6 and 6 Plus were on sale. And the pre-orders don't count as sales until they are delivered to the customer.