Apple Earnings Preview: It All Depends on the iPhone

Apple Earnings Preview: It All Depends on the iPhone

Research  these Stocks on Kapitall’s Playground Now

research now

After market close on Tuesday, Apple (AAPL) will report its earnings for the last quarter of 2011, and much like its last earnings report, it's expected to heavily depend on the success of the iPhone.

In case you don't remember, last earnings season (Q3 2011) was tough for Apple. In rare form, the company missed earnings estimates and subsequently fell 14% the following month. However, Apple stock has since rebounded to an all-time high of $431.37 and there's new optimism going into its next report late Tuesday.

According to FactSet estimates, analysts are expecting earnings of $10.06 per share on revenue of $39 billion.

iPhone Sales

Last Q3 earnings were hit by lower-than-expected iPhone demand, and iPhone sales are again expected to "serve as a key metric watched by analysts, many of whom expect unit shipments of the device to come in between 30 million and 32 million for the period." (via MarketWatch)

"The critical number is going to be the iPhone number," says Gene Munster of Piper Jaffray. This is especially true because this is the first reporting period that includes the iPhone 4S.

"Noting that the iPhone 4S is essentially the same device as the iPhone 4 with a faster chip, Munster believes that Apple hitting or surpassing the 30 million unit mark for the quarter would support his thesis that more than 90% of iPhone customers plan to upgrade to newer models, as opposed to other brands of smartphones."

This may indicate that the iPhone 5 is expected to be a "monster upgrade," says Munster.

Other Considerations

According to MarketWatch, analysts are also expecting on average between 13-14 million iPad shipments and just over 5 million mac unit shipments.

Sales of the iPad may have been hurt in the fourth quarter by the newly introduced Amazon Kindle Fire, priced 60% below the cheapest iPad available.

“Twelve million units would reflect just an 8% unit growth for iPad [quarter-over-quarter] in the holiday quarter, which we believe is a relatively low hurdle for the company,” wrote Maynard Um of UBS.

Business Section: Investing Ideas

Do you think Apple will positively surprise analysts once again?

In order to dig deeper, analyze Apple stock using Kapitall tools!

Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for AAPL and its competitors:

Use the Turbo Chart to Compare the Performance of AAPL and AMZN to the S&P 500:

*Written by Alexander Crawford.


© Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC. 

Securities products and services are offered by Kapitall Generation, LLC – a FINRA/SIPC member. 


Leave a Reply

Your email address will not be published. Required fields are marked *

  • See Most Recent Articles