Earnings preview: Apple expected to deliver $25B quarter on 16.5M iPhones

Posted:
in AAPL Investors edited January 2014
Trading at record levels ahead of its quarterly earnings report this afternoon, Apple is expected by Wall Street watchers to post its best June quarterly earnings ever, with nearly $25 billion in revenue on sales of 16.5 million iPhones.



A total of 47 analysts polled ahead of today's earnings expect, on average, for Apple to report revenue of $24.92 billion, representing a 58.7 percent year-over-year increase. That number would also be Apple's best non-holiday quarter ever, narrowly edging the $24.67 billion the company sold in this year's March quarter. Market watchers have predicted Apple will post $5.80 earnings per share in its third quarter of fiscal 2011.



On average, analysts expect Apple to report sales of around 16.5 million iPhones, according to StreetAccount data relayed by Piper Jaffray. That would be nearly double the 8.4 million iPhones the company sold in the same quarter a year ago.



Analysts are also calling for Apple to sell a record 4.2 million Macs in the June quarter. That sum would best the 4.1 million Macs Apple sold in the holiday quarter of 2010.



It's also projected to be a record quarter for iPad sales, as Wall Street anticipates the company announcing sales of 7.8 million units of its hot-selling touchscreen tablet. That would be a half-million units more than the previous high of 7.3 million sold in holiday 2010.



Apple tipped its hand on iPad sales in early June, when the company announced at its annual Worldwide Developers Conference that total sales of the device had topped 25 million. At that pace, Apple was on track to sell more than 8 million iPads in the June quarter, though overall analyst predictions are slightly lower.







Finally, the Street sees Apple reporting sales of 8.4 million iPods in the quarter. The company's June gross margins are expected to be around 39 percent.



Looking forward, a total of 44 analysts polled expect Apple's September quarter to see the company reach new heights with $27.7 billion in total revenue, with $6.42 earnings per share. Total revenue for the fiscal year concluding with the September quarter is expected to top $100 billion, with the average prediction at $103.83 billion.



Apple will report its earnings later today after markets close at 4 p.m. Eastern. AppleInsider will have full coverage.
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Comments

  • Reply 1 of 52
    cloudgazercloudgazer Posts: 2,161member
    <deleted>
  • Reply 2 of 52
    melgrossmelgross Posts: 31,744member
    The market is up all around, about as much as Apple is, due to the news about housing. I expected Apple to be up more
  • Reply 3 of 52
    originalgoriginalg Posts: 381member
    Hoping we'll see $400+ today!
  • Reply 4 of 52
    lukeilukei Posts: 332member
    What you'll see is a drop after results due to profit taking.
  • Reply 5 of 52
    nvidia2008nvidia2008 Posts: 9,262member
    6 Hours 40 minutes to go! http://wheniskeynote.com/



    See y'all on the flip side, time for bed.



    And yeah, take your profits on AAPL if you're in for the short term.



    Otherwise, hold on for the ride past $450... by maybe next year.



    Or whatever. Cheers and good luck!
  • Reply 6 of 52
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by OriginalG View Post


    Hoping we'll see $400+ today!



    TODAY? No. Not 30 points in one day. And it'll be back to $330 tomorrow, anyway.
  • Reply 7 of 52
    melgrossmelgross Posts: 31,744member
    Quote:
    Originally Posted by Tallest Skil View Post


    TODAY? No. Not 30 points in one day. And it'll be back to $330 tomorrow, anyway.



    While it likely wont go to $400 during trading today, it could do so after hours. It certainly won't go down to $330 tomorrow. Apple goes up during the second half of the year, and often drops in January. This is the hot time of the year
  • Reply 8 of 52
    tallest skiltallest skil Posts: 43,399member
    Quote:
    Originally Posted by melgross View Post


    While it likely wont go to $400 during trading today, it could do so after hours. It certainly won't go down to $330 tomorrow. Apple goes up during the second half of the year, and often drops in January. This is the hot time of the year



    But it always rises before keynotes and conference calls and drops immediately after.
  • Reply 9 of 52
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Tallest Skil View Post


    But it always rises before keynotes and conference calls and drops immediately after.



    There is usually an After Hours drop (note they release earnings right when the market closes) but I can't imagine it will be anywhere near 34 points below what it opened at today. I think the average is probably closer to 5 points. However, do to aforementioned shifts affecting the market as a whole I am not predicting any drop in After Hours.
  • Reply 10 of 52
    melgrossmelgross Posts: 31,744member
    Quote:
    Originally Posted by Tallest Skil View Post


    But it always rises before keynotes and conference calls and drops immediately after.



    Not always. That's a myth. Andy Zaky wrote an interesting article about that a while ago. I wish I had bookmarked it. So Apple may be at 380 at the end of the day, let's say. Depending on where the quarter ends, compared to the rushed out latest higher estimates of the analysts, it could either rise, or fall. It will also depend on where Apples' guidance comes in. I've seen the after hours move either way, depending on that.



    If the market gets too exuberant during the day, it could fall a few bucks after hours, as profits are taken. But if Apple out performed in one or more areas, it could run up. The next days opening usually rides upon the after hour trading, and upon how heavy it was.



    The point is that it's unpredictable beforehand. If it's 50/50, then you've got a one in two chance of guessing.



    I just checked realtime. Apple is up .88%, while the NASDAQ is up 1.57%.
  • Reply 11 of 52
    steven n.steven n. Posts: 1,120member
    Quote:
    Originally Posted by Tallest Skil View Post


    But it always rises before keynotes and conference calls and drops immediately after.



    For 2Q11 (2011 April 20), prior to earnings call, AAPL closed at 330.67 on 2011 April 18. On the next trading day, 21 April 2011, AAPL closed at 339.30, a 2.6% jump UP.
  • Reply 12 of 52
    aaronjaaronj Posts: 1,595member
    Quote:
    Originally Posted by melgross View Post


    While it likely wont go to $400 during trading today, it could do so after hours. It certainly won't go down to $330 tomorrow. Apple goes up during the second half of the year, and often drops in January. This is the hot time of the year



    Yeah, but it's like $500,000,000 per share right now!



    Anyways, I can't imagine $330. That would require a drop of nearly $50. I also don't see $400 soon, either.



    I do think that $400 is definitely do-able this year, though.
  • Reply 13 of 52
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by Tallest Skil View Post


    But it always rises before keynotes and conference calls and drops immediately after.



    It doesn't always do anything. And once there is a totally predictable pattern like that, it will do the opposite, as the smart investor will get ahead of what it always does, and sell/buy before it does it.
  • Reply 14 of 52
    boeyc15boeyc15 Posts: 986member
    Quote:
    Originally Posted by nvidia2008 View Post


    6 Hours 40 minutes to go! http://wheniskeynote.com/




    Nice.
  • Reply 15 of 52
    melgrossmelgross Posts: 31,744member
    Quote:
    Originally Posted by AaronJ View Post


    Yeah, but it's like $500,000,000 per share right now!



    Anyways, I can't imagine $330. That would require a drop of nearly $50. I also don't see $400 soon, either.



    I do think that $400 is definitely do-able this year, though.



    I've been seeing those crazy numbers on a number of sites beginning a bit over a week ago. Some software is bugging out.



    Apple has moved down to about a buck up. But the overall market is still doing well. I wonder if so e late in for has come out, though I can't find anything, or if profit taking has already begun. Of course, some manipulation ahead of the report is also possible.
  • Reply 16 of 52
    blah64blah64 Posts: 928member
    Quote:
    Originally Posted by melgross View Post


    Not always. That's a myth. Andy Zaky wrote an interesting article about that a while ago. I wish I had bookmarked it. So Apple may be at 380 at the end of the day, let's say. Depending on where the quarter ends, compared to the rushed out latest higher estimates of the analysts, it could either rise, or fall. It will also depend on where Apples' guidance comes in. I've seen the after hours move either way, depending on that.



    If the market gets too exuberant during the day, it could fall a few bucks after hours, as profits are taken. But if Apple out performed in one or more areas, it could run up. The next days opening usually rides upon the after hour trading, and upon how heavy it was.



    The point is that it's unpredictable beforehand. If it's 50/50, then you've got a one in two chance of guessing.



    ^ That. ^



    The one thing I'll re-emphasize is guidance. No matter whether this past Q's earnings are above or below estimates (unless it's a blow-out), the biggest factor that will affect the price moving forward over the next few days, and potentially even weeks, is guidance. Most people expect Apple's guidance to be very conservative, but if they surprise with significantly lower or higher than expected, that will drive the stock price.



    This only makes sense because we're looking at longer-term trajectories, and a small change in "slope" right now can make a huge difference out in the future.
  • Reply 17 of 52
    bagmanbagman Posts: 349member
    Consensus by the folks who are the leaders in "predictions" actually has Apple at over 26B in revenue, and over 17M in iphones, as well as over 8M ipads (although many have pegged this at almost 10M). Anyhow, it will be a blowout (again), compared to last year, and add about $3.00EPS.



    The KEY is what wall street will peg the PE ratio at? If it goes back down to 15 again, Apple will settle down at $360. If it stays near 16PE, it will rise to $384. Who knows what the "new" PE will be, for Wall Street has been ratcheting it down from 22 in the last year. (imagine it at 22 still: $522).
  • Reply 18 of 52
    Quote:
    Originally Posted by OriginalG View Post


    Hoping we'll see $400+ today!



    While Google jumped 12.5% the day after its earnings call, that is not Apple's mo... so far.



    ... but I'm getting this hunch that we could see a helluva jump tomorrow... maybe not 10% but a good whack upwards... the iPad numbers have to be really stellar.
  • Reply 19 of 52
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by melgross View Post


    Not always. That's a myth. Andy Zaky wrote an interesting article about that a while ago. I wish I had bookmarked it. So Apple may be at 380 at the end of the day, let's say. Depending on where the quarter ends, compared to the rushed out latest higher estimates of the analysts, it could either rise, or fall. It will also depend on where Apples' guidance comes in. I've seen the after hours move either way, depending on that.



    If the market gets too exuberant during the day, it could fall a few bucks after hours, as profits are taken. But if Apple out performed in one or more areas, it could run up. The next days opening usually rides upon the after hour trading, and upon how heavy it was.



    The point is that it's unpredictable beforehand. If it's 50/50, then you've got a one in two chance of guessing.



    I just checked realtime. Apple is up .88%, while the NASDAQ is up 1.57%.



    In my experience (14 years as an AAPL investor), Apple has to beat the street consensus by at least 10% to sustain a rally. Meaning: if reported earnings are not in the neighborhood of $6.50 we are likely to see a selloff after hours and/or tomorrow. Not that any of this momentary stuff should matter too much to investors. The macro story is that AAPL is on a long term trend towards lower multiples, which means that earnings increases probably will not result in proportional increases in shareholder value.



    Also worth keeping in mind is AAPL's strong rally in anticipation of this earnings report, over the last couple of weeks. Sustaining that sort of momentum will require as massive blowout report, something like $7.00 or more with no blemishes on margins, revenues or guidance. That kind of trifecta is rare, even for Apple.
  • Reply 20 of 52
    dr millmossdr millmoss Posts: 5,403member
    Quote:
    Originally Posted by Bagman View Post


    Consensus by the folks who are the leaders in "predictions" actually has Apple at over 26B in revenue, and over 17M in iphones, as well as over 8M ipads (although many have pegged this at almost 10M). Anyhow, it will be a blowout (again), compared to last year, and add about $3.00EPS.



    The KEY is what wall street will peg the PE ratio at? If it goes back down to 15 again, Apple will settle down at $360. If it stays near 16PE, it will rise to $384. Who knows what the "new" PE will be, for Wall Street has been ratcheting it down from 22 in the last year. (imagine it at 22 still: $522).



    The PE compression trend is longer term than that. It's been going on for 3 1/2 years. The reason many investors haven't noticed is that Apple has reported massive earnings increases during this same time span. If the stock was trading today at multiples close to what it was three years ago, AAPL would be, as you say, well north of $500 now.
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