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Earnings preview: Modest expectations for Apple's June 2013 quarter

post #1 of 44
Thread Starter 
As anticipation grows for Apple's next-generation iPhones and iPads, analysts aren't expecting much this afternoon, when the company will announce the results of its recently concluded June quarter.

Berlin


With 44 analysts polled by Thomson Reuters, the average estimates for the June quarter call for $35.01 billion in revenue. That would be about flat from a year ago, when sales were $35.02 billion.

But earnings per share are expected to see a sharp decline from the year-ago quarter, from $9.32 in 2012 to an average estimate of $7.32 for June 2013.

As for specific product sales, RBC Capital Markets pegs Wall Street as expecting Apple to have sold 26.1 million iPhones in the June quarter. Like with the market's expected revenue, that number would be about flat year over year.

Investors also expect sales of 17.4 million iPads for the three-month period, a slight increase from the 17 million iPads Apple sold a year ago.

Averaged estimates also call for sales of 3.9 million Macs and 4.9 million iPods. Gross margin is expected to be about 36.7 percent.

Looking forward to the September quarter, RBC's Amit Daryanani expects Apple will offer guidance slightly below Wall Street expectations, with forecasted revenue of $36 billion and earnings per share of $7.50. He believes investors hope to see guidance of $37.9 billion in revenue and $8.12 earnings per share for the September frame.

Investors generally expect that Apple will launch multiple new iPhones toward the end of the September quarter. The company is rumored to be planning both a high end "iPhone 5S" and a new mid-range plastic "iPhone Lite" for launch in the coming months.

If those handsets were to go on sale in September, about a year after the debut of the iPhone 5, it's unlikely that the products would play a significant role in the launch quarter. Instead, the full effect of those launches would be seen in the following December quarter, where the iPhones would be available for the full three months.

Apple will report its results for the concluded June quarter and current September quarter after markets close this afternoon, and a conference call with company executives is scheduled for 5 p.m. Eastern, 2 p.m. Pacific. AppleInsider will have full, live coverage.
post #2 of 44
Quote:
…the average estimates for the June quarter call for $35.01 billion in revenue.

One more time: so when Apple posts $35.00 billion, the stock will drop 40 points.
post #3 of 44

I am expecting a beat on iphone sales, a miss on ipad sales and a beat on EPS on massive buybacks. I am keeping cash in case of a major drop but I am going in with shares in one account and options leaps in the other.

 

Last year we had the new ipad 3 for this quarter, being flat this year on ipads would be great news.

post #4 of 44
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Originally Posted by AppleInsider View Post

Berlin

Oh God, the stores are empty, no one is buying, Apple is doomed! /s

post #5 of 44
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Originally Posted by herbapou View Post

Last year we had the new ipad 3 for this quarter, being flat this year on ipads would be great news.

Excellent observation.

post #6 of 44
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Originally Posted by anantksundaram View Post

Excellent observation.

 

Looks like the analysts are very bullish on ipad mini sales to compensate for the lack of a new ipad. Thats the only bullish estimate they made.

post #7 of 44
It would be nice for an article like this to tell us what Apple's guidance is in relation to the so called analysts. My guess is analysts are at the high end of Apple's guidance range, which if so, is not modest.
post #8 of 44
Quote:
Originally Posted by TBell View Post

It would be nice for an article like this to tell us what Apple's guidance is in relation to the so called analysts. My guess is analysts are at the high end of Apple's guidance range, which if so, is not modest.

Well, it IS their drummed-up device. They're the ones who thought Apple "needed" it in the first place, so of course they think it will succeed.
post #9 of 44
Quote:
Originally Posted by Tallest Skil View Post


One more time: so when Apple posts $35.00 billion, the stock will drop 40 points.

 

Assuming Apple meets estimates, guidance is going to be a key factor on price movement.

IF they miss those lowball estimates, the stock will drop hard because that would meen the YoY decline is very severe. We already have a YoY estimate decline of 25%, doing even worst is almost unthinkable and not price in at all.

post #10 of 44

Wouldn't 'meh' numbers already be priced in to the stock?  So really we should only see a big swing if the numbers are much better/worse than the consensus.  Of course Wall Street is never rational when it comes to Apple so if they post numbers that everyone is expecting the stock will probably still tank after hours.

post #11 of 44
Quote:
Originally Posted by TBell View Post

It would be nice for an article like this to tell us what Apple's guidance is in relation to the so called analysts. My guess is analysts are at the high end of Apple's guidance range, which if so, is not modest.

 

They are at the high end on revenue, but estimates on margins are low, so EPS is low at 25% YoY decline. Apple did not provide EPS guidance.

post #12 of 44
Why the picture of an empty Apple store? LOL. 33.5 - 35.5 billion dollars is an insane amount of money. I happen to think apple is going to beat their own guidance by a good amount, I think some of the carrier promotions are helping sell a lot more iPhones than Apple and analysts are expecting, if Verizon's earnings are any indication (and they are).
post #13 of 44
Quote:
Originally Posted by TBell View Post

It would be nice for an article like this to tell us what Apple's guidance is in relation to the so called analysts. My guess is analysts are at the high end of Apple's guidance range, which if so, is not modest.


post #14 of 44

If you squint, you can already see the trolls massing together at the horizon. Brace yourselves.

post #15 of 44
Quote:
Originally Posted by herbapou View Post

 

Assuming Apple meets estimates, guidance is going to be a key factor on price movement..

 

This. Even the strongest Apple stock bulls expected this to a 'meh' quarter which is why the stock is where it is. Even if Apple were to come in a little lower, it won't matter, the guidance will be the key, as will any hints on when new products can be expected. That's where the 'news' is for the Street. 

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post #16 of 44

I love how "meh, not expecting much" is tantamount to sales/revenue/profit that will probably be some of the largest in corporate history, ever, and utterly decimating that of all the other major software/tech companies. 

 

But hey, it's Apple, so "meh" indeed. 

post #17 of 44
No "Fire Timmy Cook" trolls yet?

"Apple should pull the plug on the iPhone."

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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #18 of 44
Quote:
Originally Posted by Tallest Skil View Post

One more time: so when Apple posts $35.00 billion, the stock will drop 40 points.

Let's face it, if Apple reported $135 billion the stock would drop also, because the 'Law of Large Numbers' was at play. 1oyvey.gif
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post #19 of 44

I hope that the situation of the stock won't make us flabbergasted after the preview. A new precipitous drop in the stock will be excruciating for both the board of Apple and us. However I really abominate the idea that Tim Cook must be expelled. I find him good as a CEO so far.


Edited by nickimsonik - 7/23/13 at 11:39am
post #20 of 44
Quote:
Originally Posted by Slurpy View Post

I love how "meh, not expecting much" is tantamount to sales/revenue/profit that will probably be some of the largest in corporate history, ever, and utterly decimating that of all the other major software/tech companies. 

But hey, it's Apple, so "meh" indeed. 

Exactly. In fact, every tech / software CEO is wishing he/she could report such a 'meh' quarter ... along with the rest of the stuff like, oh I don't know, perhaps the money in the bank, customer satisfaction, P/E ratio ...
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post #21 of 44
Quote:
Originally Posted by nickimsonik View Post

I hope that the situation of the stock won't make us flabbergasted after the preview. A new precipitous drop in the stock will be excruciating for both the board of Apple and us.

I have the vodka close at hand ...
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post #22 of 44
Quote:
Originally Posted by Suddenly Newton View Post

No "Fire Timmy Cook" trolls yet?

 

They're busy writing up and finalizing their adjective-laden, hateful, ignorant screeds, which they will then copy and paste incessantly once the results are out. 

post #23 of 44
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Originally Posted by anantksundaram View Post

Excellent observation.

Yep, but the analysts won't think of that kind of logic.

A non tech's thoughts on Apple stuff 

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A non tech's thoughts on Apple stuff 

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post #24 of 44
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Originally Posted by thataveragejoe View Post

 

This. Even the strongest Apple stock bulls expected this to a 'meh' quarter which is why the stock is where it is. Even if Apple were to come in a little lower, it won't matter, the guidance will be the key, as will any hints on when new products can be expected. That's where the 'news' is for the Street. 

That is my thinking as well. I think the price is already reflecting the pessimism so if the estimates fail to meet predictions I am hoping there won't be a huge decline. If Apple fails to introduce an iPhone lite or the 5S is universally panned then the stock is in real trouble. With Samsung's stumble with the S4 being received as being blasé it would have been a great time to also introduce a larger display iPhone as well. My guess is that with the iPhone lite and the 5S it was just too much to take on in one year and it will have to wait until 2014. 

post #25 of 44
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Originally Posted by charlituna View Post


Yep, but the analysts won't think of that kind of logic.

Analysts? Logic? You must be joking.

post #26 of 44
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Originally Posted by AndrewofArabia View Post

Why the picture of an empty Apple store?

Adds to the FUD

And I agree that Apple will likely meet or beat their guidance with no issues. After all, when they made it they knew there was no iPad launching etc.

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A non tech's thoughts on Apple stuff 

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post #27 of 44
Quote:
Originally Posted by Tallest Skil View Post


Well, it IS their drummed-up device. They're the ones who thought Apple "needed" it in the first place, so of course they think it will succeed.

 

Yeah, it's only Apple's most successful (non-phone) product, in terms of sales, reviews, etc, and everyone I know who owns ones absolutely loves it, more than the regular iPad. Every single smaller iPad that is released still pales to it, and it is used as the golden standard for smaller tablets. It fills niches and demographics where the larger tablet would be more impractical, unfomfortable, or unfeasible. It's universally praised as a fantastic device. 

 

But yeah, just ignore all that. It's "drummed up", and Apple doesn't "need" it, and they should have never released it, because, you didn't think they should- and you're sticking to that like a stoic hero...or something.  

post #28 of 44
Quote:
Originally Posted by Slurpy View Post

Yeah, it's only Apple's most successful (non-phone) product, in terms of sales, reviews, etc, and everyone I know who owns ones absolutely loves it, more than the regular iPad.

Is it? Were the sales broken down to show that?
Quote:
It fills niches and demographics where the larger tablet would be more impractical, unfomfortable, or unfeasible. It's universally praised as a fantastic device. 

And there we go again. 1rolleyes.gifThat's not true, and you know it.
post #29 of 44
Quote:
Originally Posted by Slurpy View Post

 

Yeah, it's only Apple's most successful (non-phone) product, in terms of sales, reviews, etc, and everyone I know who owns ones absolutely loves it, more than the regular iPad. Every single smaller iPad that is released still pales to it, and it is used as the golden standard for smaller tablets. It fills niches and demographics where the larger tablet would be more impractical, unfomfortable, or unfeasible. It's universally praised as a fantastic device. 

 

But yeah, just ignore all that. It's "drummed up", and Apple doesn't "need" it, and they should have never released it, because, you didn't think they should- and you're sticking to that like a stoic hero...or something.  

 

My iPad 2 has iPad mini envy.

post #30 of 44
Quote:
Originally Posted by Tallest Skil View Post


Is it? Were the sales broken down to show that?
And there we go again. 1rolleyes.gifThat's not true, and you know it.

 

There's been a shitload of estimates that show that, everywhere from supplier and component checks to sales channels. And you know, common sense. And if you don't have the imagination to to aknowledge that millions of situations exist where a screen somewhere between 4" and 10" makes some sense, and choose to ignore the personal experiences of those who state as much (like myself, who owns both), then that's your issue.  But **** it, I really don't plan on getting in this with you, and I'd be masochistic fool to do so and its an exercise in extreme self-pain. I'll make it easy:

 

YOU WIN. TOPIC CLOSED.

post #31 of 44
Quote:
Originally Posted by Slurpy View Post

…estimates…

Okay.
Quote:
TOPIC CLOSED.

For now, at least.
post #32 of 44
Originally Posted by AppleInsider View Post

Gross margin is expected to be about 36.7 percent.

 

Pretty impressive. Especially for a hardware revenue-driven company.

 

 

 

Originally Posted by AppleInsider View Post

Instead, the full effect of those launches would be seen in the following December quarter, where the iPhones would be available for the full three months.

 

Yup.  There will be quarters in which Apple is just coasting along with few if any new hardware, software, or services updates.  Late-year product refreshes certainly help holiday quarter sales, but what about the rest of the year?  Is there a specific reason why Apple is bunching up their hardware updates?  Or is it because of Apple's engineering cycles and/or other factors out of Apple's control?

 

Well, the Haswell release dictated Apple's Mac release schedule this year, pushing most of them (other than the MacBook Air) into the second half.  And there may be issues with other component suppliers.  E.g. LCD panel makers who are having trouble ramping up production for iMac, iPhone, iPad, etc.

 

I think the real reason for the "bunching" is that WWDC happens in June every year.  This is where developers first get OS X and iOS previews and learn about the new features.  Some of the new features will require extensive changes to OS X and iOS apps, and those changes could take months to design, implement, test, and iterate.  So, by late CY Q3 and early CY Q4, apps will be ready for the new systems and devices.  This more or less forces all iOS device releases to happen late in the year, along with with the new iOS release.  Mac hardware releases aren't nearly as synchronized with OS X releases, but Mac revenue is a smaller slice of the Apple revenue pie these days.  Still, perfect timing for the holiday buying season.  

 

Great strategy.  Except for CY Q1 and Q2 with few if any hardware or software updates other than minor point releases or spec bumps.  So what can Apple do to "fill in" the first half of the year with product announcements, like they used to do with iPad?  Well, think of it this way.  Apple has set the stage for products like the current Apple TV, that run iOS but somewhat independent of the iOS release cycle because you never see the bare iOS GUI.  Of course, the current Apple TV isn't a big enough product to fill that stage.  But maybe by spring 2014, Apple could have all its ducks in a row.  Lots of contracts to be signed, content deals to be negotiated, infrastructure to be built out, new 4K display technologies to be developed, ad nauseam.  I wouldn't be surprised if they thought they could get it all done by last spring.  We'll see what happens next year.

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post #33 of 44
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Originally Posted by AndrewofArabia View Post

Why the picture of an empty Apple store? LOL. 33.5 - 35.5 billion dollars is an insane amount of money. I happen to think apple is going to beat their own guidance by a good amount, I think some of the carrier promotions are helping sell a lot more iPhones than Apple and analysts are expecting, if Verizon's earnings are any indication (and they are).

 

I went to a Bell store this weekend, it didnt even had the iphone on display, no ads, no models. You had the galaxy phones in the center of the room.  There was no way of telling they are even selling the thing unless you asked for it. That be cant be good for sales... Apple needs to improve its relations with the carriers.


Edited by herbapou - 7/23/13 at 12:50pm
post #34 of 44
Quote:
Originally Posted by herbapou View Post

I went to a Bell store this weekend, it didnt even had the iphone on display, no ads, no models. You had the galaxy phones in the center of the room.  There was no way of telling they are even selling the thing unless you asked for it. That be cant be good for sales... Apple needs to improve its relations with the carriers.
How? By ceding control to carriers like Android does? No thanks.
post #35 of 44
Why is Apple up almost 4% after hours? Looks like the stock just jumped in the past few minutes.
post #36 of 44

Earnings came in slightly above expectations...... aaaaaand the stock will get slammed.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #37 of 44
Quote:
Originally Posted by Rogifan View Post

Why is Apple up almost 4% after hours? Looks like the stock just jumped in the past few minutes.

 

It was down in trading earlier.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #38 of 44
Quote:
Originally Posted by Rogifan View Post

Why is Apple up almost 4% after hours? Looks like the stock just jumped in the past few minutes.


$35.3B in revenue, slightly up from last year

post #39 of 44
Quote:
Originally Posted by SpamSandwich View Post

Earnings came in slightly above expectations...... aaaaaand the stock will get slammed.
Stock is up so far. But that could change when the conference call starts and guidance for next quarter is given.
post #40 of 44
Quote:
Originally Posted by Rogifan View Post


Stock is up so far. But that could change when the conference call starts and guidance for next quarter is given.

 

I guess being just slightly above expectations is a huge plus in this time of PC industry collapse.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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