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Apple Earnings Preview: All Eyes on Next Quarter's Guidance Ahead of New iPhones, Apple Card, and Apple TV+

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Apple is set to report its earnings results for the third quarter of its 2019 fiscal year at 1:30 p.m. Pacific Time today.

aapl-logo-800x593.jpg

The quarter began March 31, 2019 and ran through June 29, 2019, according to Apple's fiscal year accounting calendar.

Apple's guidance for the quarter from April 30:revenue: $52.5 billion-$54.5 billion
gross margin: 37-38 percent
op. ex.: $8.7 billion-$8.8 billion
other income/expense: $250 million
tax rate: approximately 16.5 percentApple's guidance suggests it will report its second-best third quarter ever by revenue:
2014: $37.4 billion
2015: $49.6 billion
2016: $42.4 billion
2017: $45.4 billion
2018: $53.3 billion
2019: $52.5+ billionWall Street's revenue estimates average out to $53.39 billion, slightly below the midpoint of Apple's guidance, based on 33 analysts tracked by Yahoo Finance. Earnings per share is estimated to be $2.10.

Key Facts and What to Look For
iPhone revenue of $26.5 billion, according to a Bloomberg average.
Product launches in the third quarter: 13-inch and 15-inch MacBook Pro refresh on May 21 (excluding entry-level 13-inch model, which was updated in July) and seventh-generation iPod touch on May 28.
Apple's guidance for its fourth fiscal quarter, which typically encompasses the launch of at least some new iPhone models in mid-to-late September. Wall Street expects fourth quarter revenue to be $61 billion, down around three percent year-over-year, according to Bloomberg.
Apple's revenue in Greater China and any potential commentary regarding the U.S.-China trade war. Apple reported revenue of $9.5 billion in Greater China in the year-ago quarter, which was 19 percent growth.
Apple's services revenue reached an all-time high of $11.45 billion in the second quarter, and investors will be looking for continued growth from the launch of Apple News+ six days before the third quarter began. The upcoming launches of the Apple Card later this summer and Apple Arcade and Apple TV+ in the fall could also be at least partially baked into Apple's fourth quarter guidance depending on exact launch dates.
Apple's "Wearables, Home, and Accessories" category also remains key. Last quarter, Apple said the category was the size of a Fortune 200 company, buoyed by the success of the Apple Watch and AirPods.Apple's CEO Tim Cook and CFO Luca Maestri will discuss the company's earnings results on a conference call at 2:00 p.m. Pacific Time today. MacRumors will highlight key points from the one-hour call as it occurs live.

Article Link: Apple Earnings Preview: All Eyes on Next Quarter's Guidance Ahead of New iPhones, Apple Card, and Apple TV+
 
Article Link
https://www.macrumors.com/2019/07/30/apple-3q-2019-earnings-preview/
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I expect them to miss most metrics, possibly each one. Apple is in an innovation downspiral, eventually it will start being reflected in the earnings. Maybe not yet - probably, but maybe not - but definitely eventually.
 
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citysnaps said:
Definitely, eventually, we're all going to die.
Click to expand...

Funny and accurate. All I meant was that the initial snowballing effect of hemorrhaging users and brand loyalty takes several update cycles before it begins hitting the bottom line and showing up in revenue. Especially with Tim Cook’s tactics of raising price and forcing upgrades, methods he uses to slow the awareness of the issue.

Not sure if it will be this year or next, but the problems Apple is facing are very real and urgent, so expect to see them shortly. It will start with missing Wall Street estimates, then slowly but surely the sales will begin dropping off on a chart graph like never before seen. It will be interesting to see if we are still at the “early trickle” stages or the full-on freefall stages. But I do strongly believe Apple is in for a world of hurt, and sooner rather than later. Just one of those “can’t prove it but it’s true” things. Or CPIBIT as I like to call it.
 
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Bawstun said:
I expect them to miss most metrics, possibly each one. Apple is in an innovation downspiral, eventually it will start being reflected in the earnings. Maybe not yet - probably, but maybe not - but definitely eventually.
Click to expand...
Be specific.

You think they will earn under $52.5B in sales and less than $2.10/share?

I expect record services revenue, solid top line revenue within their guidance, and more than $2.10/share.
 
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Bawstun said:
Funny and accurate. All I meant was that the initial snowballing effect of hemorrhaging users and brand loyalty takes several update cycles before it begins hitting the bottom line and showing up in revenue. Especially with Tim Cook’s tactics of raising price and forcing upgrades, methods he uses to slow the awareness of the issue.

Not sure if it will be this year or next, but the problems Apple is facing are very real and urgent, so expect to see them shortly. It will start with missing Wall Street estimates, then slowly but surely the sales will begin dropping off on a chart graph like never before seen. It will be interesting to see if we are still at the “early trickle” stages or the full-on freefall stages. But I do strongly believe Apple is in for a world of hurt, and sooner rather than later. Just one of those “can’t prove it but it’s true” things. Or CPIBIT as I like to call it.
Click to expand...

Somehow I can't help laughing, since Apple is now rumored soon to bring out a Mac Book Pro with display bigger than the 15" and having the return of scissors-style keyboard improvement -- and god knows what else to please those of us hanging out with our old and still quite functional gear in the meantime... even though we're ready for the right upgrade when it shows up. Sounds like my next laptop will come to market right soon now. My trusty mid-2012 MBP must tremble at the idea of becoming a spare.

But hey, all companies do face "very real and urgent" matters every day, whether behemoths or mom and pop shops. Apple CEOs have dodged their share of ups and downs if you recall. That will doubtless continue. Still if you like to keep eye on CPIBIT as you like to call it, it's a free country... the rest of us will probably just be watching some better known acronyms like EBITDA... or maybe even just keeping an eye on Apple's refurb and clearance shelves in case some still nifty piece of gear pops up at an even better price and still eligible for AppleCare. :D
 
Ive had already cashed out when Isaacson reminded us Cook is not a product guy.
 
Bawstun said:
Funny and accurate. All I meant was that the initial snowballing effect of hemorrhaging users and brand loyalty takes several update cycles before it begins hitting the bottom line and showing up in revenue. Especially with Tim Cook’s tactics of raising price and forcing upgrades, methods he uses to slow the awareness of the issue.

Not sure if it will be this year or next, but the problems Apple is facing are very real and urgent, so expect to see them shortly. It will start with missing Wall Street estimates, then slowly but surely the sales will begin dropping off on a chart graph like never before seen. It will be interesting to see if we are still at the “early trickle” stages or the full-on freefall stages. But I do strongly believe Apple is in for a world of hurt, and sooner rather than later. Just one of those “can’t prove it but it’s true” things. Or CPIBIT as I like to call it.
Click to expand...

If I had a dollar for every time I heard that....
 
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Guidance is important here, and that’s going to be big and accurate. So AAPL should hit all time highs by November.

Don’t forget the conference call. Apple arcade and Apple credit card and Apple plus TV stuff will be figured into that big guidance somewhat.

China Tariffs should be a non issue for Apple - that deal was already made and confirmed. trump is just milking it
[doublepost=1564517693][/doublepost]Anyone worried that the huge Hubei growth means less iPhones sold in China? I see it, but not concerned.
 
Baymowe335 said:
Be specific.

You think they will earn under $52.5B in sales and less than $2.10/share?

I expect record services revenue, solid top line revenue within their guidance, and more than $2.10/share.
Click to expand...

I expect their bread and butter iPhone sales to miss target. And I don’t expect it to recover for many years. Their services, the watch, everything ties into iOS. Without iOS on iPhone and iPad, their App Store is irrelevant. iCloud becomes mostly irrelevant. It’s all tied to the iPhone, as much as Apple doesn’t want anybody to think that it is. Their constant lack of innovation, raising prices, crippling stores, and slowing down devices IS going to manifest in overall revenue. It’s managed to be delayed by several smart Cook moves but he can only do this for so long. India and China are also major problems that will be reflected in revenue shortly. Just don’t know which earnings report it will be, but it should be soon. IMO of course. I could be totally wrong and they blow expectations out of the water. I just don’t see how that will be possible.
 
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Bawstun said:
I expect their bread and butter iPhone sales to miss target. And I don’t expect it to recover for many years. Their services, the watch, everything ties into iOS. Without iOS on iPhone and iPad, their App Store is irrelevant. iCloud becomes mostly irrelevant. It’s all tied to the iPhone, as much as Apple doesn’t want anybody to think that it is. Their constant lack of innovation, raising prices, crippling stores, and slowing down devices IS going to manifest in overall revenue. It’s managed to be delayed by several smart Cook moves but he can only do this for so long. India and China are also major problems that will be reflected in revenue shortly. Just don’t know which earnings report it will be, but it should be soon. IMO of course. I could be totally wrong and they blow expectations out of the water. I just don’t see how that will be possible.
Click to expand...
Where is it you think all these people are going when they stop buying iPhones? Samsung and Google mobile divisions are not doing well. Huawei? I just don't see it. You're confusing the hardcore enthusiasts with the main stream. Everyone I know will just continue to buy iPhones because it's what they know. They may buy every 3-4 years instead of 2, but they're still paying those services every month regardless.
 
Bawstun said:
I expect their bread and butter iPhone sales to miss target. And I don’t expect it to recover for many years. Their services, the watch, everything ties into iOS. Without iOS on iPhone and iPad, their App Store is irrelevant. iCloud becomes mostly irrelevant. It’s all tied to the iPhone, as much as Apple doesn’t want anybody to think that it is. Their constant lack of innovation, raising prices, crippling stores, and slowing down devices IS going to manifest in overall revenue. It’s managed to be delayed by several smart Cook moves but he can only do this for so long. India and China are also major problems that will be reflected in revenue shortly. Just don’t know which earnings report it will be, but it should be soon. IMO of course. I could be totally wrong and they blow expectations out of the water. I just don’t see how that will be possible.
Click to expand...
So you're predicting that the iPhone business declined? Which everyone already knows? Nothing else?

People aren't switching away from iOS...they just aren't upgrading as often. Engagement is measured by active devices and services, which will likely be a record. Are you saying services will be below $11.5B in the quarter?
 
Bawstun said:
I expect their bread and butter iPhone sales to miss target. And I don’t expect it to recover for many years.
Click to expand...

So do you have an actual figure for their "target"? I don't recall Apple giving any guidance for iPhone sales/revenue. So how do you judge whether they missed an arbitrary target?
 
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Baymowe335 said:
My predictions:

Revenue: $53.5B
EPS: $2.20/share
Guidance for Q4: $62B

Record services revenue (something over $11.5B).
Click to expand...
I was close.

EPS: $2.18

Revenue: $53.8B

Guidance: $61-$64B

Services $11.5B

Overall, beat and very solid. Services was not up as much due to a one time gain last year. Stock up.
 
Baymowe335 said:
So you're predicting that the iPhone business declined? Which everyone already knows? Nothing else?

People aren't switching away from iOS...they just aren't upgrading as often. Engagement is measured by active devices and services, which will likely be a record. Are you saying services will be below $11.5B in the quarter?
Click to expand...

They aren’t upgrading as often, *and* when they do, a higher percentage is choosing Android for the first time. That’s why/how the mass hemorrhaging has been slowed and veiled. Soon it will become apparent in all aspects of sales and revenue metrics. Things take time to trickle down from the cause and effect. It’s a process.
 
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Bawstun said:
They aren’t upgrading as often, *and* when they do, a higher percentage is choosing Android for the first time. That’s why/how the mass hemorrhaging has been slowed and veiled. Soon it will become apparent in all aspects of sales and revenue metrics. Things take time to trickle down from the cause and effect. It’s a process.
Click to expand...
They just posted their best June quarter ever and sequential improvement in iPhone.

Guidance is higher than last year for Q4.
 
Baymowe335 said:
They just posted their best June quarter ever and sequential improvement in iPhone.

Guidance is higher than last year for Q4.
Click to expand...

That’s one way to spin it. Here is another:

Apple Reports Declining Profits and Slowing Growth, Again

On Tuesday, the Silicon Valley behemoth said that its net income had fallen nearly 13 percent and that its revenue growth had slowed to 1 percent in the latest quarter, with iPhone sales continuing to decline and gains in the company’s services business failing to make up the difference.

https://www.nytimes.com/2019/07/30/technology/apple-earnings-iphone.html
 
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