Apple Inc. (Nasdaq: AAPL) will report its highly anticipated fiscal fourth-quarter earnings on Thursday after the market closes, and investors will be looking for clarity from the company on early iPhone 8 and iPhone X demand and production.
Conflicting media and analyst reports on iPhone 8 production cuts and inconsistent third-party estimates of iPhone 8 and iPhone X sales have left Apple investors in the dark. However, Tim Cook and company could shed some light on the situation Thursday afternoon.
Investors have already driven Apple stock up 43.7 percent in 2017 in anticipation of the new 10-year anniversary iPhone models, so expectations for the fourth quarter and beyond are high.
When it comes to the headline numbers, Wall Street analysts are expecting Apple to report earnings per share of $1.87 on revenue of $51.1 billion. Those numbers would represent year-over-year growth of 11.9 percent and 9.2 percent, respectively.
Investors will likely be looking below the surface-level numbers for other key metrics as well. HSBC Global Research analyst Steven Pelayo says Apple will likely report 47 million total iPhone shipments, 9.9 million iPad shipments and 4.9 million Mac shipments. HSBC also projects a 5 percent increase in iPhone average sales price.
Pelayo says Apple is well-positioned to exceed expectations headed into 2018.
“We are 9 percent ahead of the Street for fiscal 2018 on richer product mix of iPhone, Watch and Services driving stronger ASP, revenue and margins,” he says. “Lofty free cash flow also continues to drive shareholder returns and cash on hand.”
Apple began presales of the iPhone X less than a week ago, so Apple’s guidance will be extremely important. On Tuesday, Piper Jaffray analyst Michael Olson said investors shouldn’t panic if Apple’s fiscal first-quarter guidance is on the light side.
“When Apple reports on Thursday, we expect an in-line September quarter, with December quarter guidance that is in-line to slightly below consensus,” Olson says. “Despite potential for iPhone 8 to see a short-term negative impact from customers waiting for iPhone X along with ongoing inventory shortages for iPhone X, we recommend owning AAPL on potential for a strong overall [fiscal 2018] cycle, rising [average selling prices] and a favorable services revenue trajectory.”
Piper Jaffray has…
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