Apple Expected to Report Strong Earnings Today, But Unlikely to Set Record-Breaking Quarter

[MacRumors]

Apple is set to report its earnings results for the second quarter of its 2017 fiscal year at 1:30 p.m. Pacific Time today.

Apple provided the following guidance for its second quarter on January 31:
o revenue between $51.5 billion and $53.5 billion
o gross margin between 38 percent and 39 percent
o operating expenses between $6.5 billion and $6.6 billion
o other income/expense of $400 million
o tax rate of 26 percentThat guidance suggests Apple will report its second-best March quarter earnings results in the company's history:
o Q2 2013: $43.6 billion
o Q2 2014: $45.6 billion
o Q2 2015: $58 billion
o Q2 2016: $50.6 billion
o Q2 2017: $51.5+ billionWall Street analysts generally expect Apple to meet the higher end of its guidance, with revenue estimates averaging around $53 billion. If accurate, Apple will have grown around four to six percent compared to the year-ago quarter, marking its second consecutive quarter of growth after an uncharacteristic nine-month skid last year.

MacRumors.com compiled estimates from over a dozen financial institutions and independent firms tracking Apple and the company's stock. The figures are listed below, ranked from highest to lowest in terms of total revenue. The date column reflects when each research note was distributed to clients.

On a category-by-category basis, the highlight of Apple's earnings results will likely be its services, such as the App Store, iTunes, Apple Music, and Apple Pay. Most analysts estimate Apple's services revenue will be up to 20 percent higher, totaling up to $7.4 billion versus $5.9 billion a year ago.

iPhone remains Apple's most important product by a significant margin. Most analysts predict that Apple topped the 51.1 million iPhones it sold in the year-ago quarter, with several estimates coming in above 52 million. However, four analysts expect iPhone sales to decline compared to the year-ago quarter.

iPad unit sales are forecasted to decline to between 7 million and 9.8 million compared to the 10.2 million tablets Apple sold in the year-ago quarter, while Mac sales should remain relatively flat on a year-over-year basis.

Meanwhile, analysts believe Apple Watch sales totaled between 1.6 million and 3 million in the quarter. Apple does not disclose Apple Watch sales in its quarterly earning results, instead grouping the device under its "Other Products" category, alongside iPods, Apple TVs, Beats Electronics, and accessories.

Apple's cash and marketable securities total is projected to have surpassed $250 billion in the second quarter, up from $246.1 billion last quarter. Apple is expected to provide an update about its capital allocation, including dividends and share buybacks, as it usually does at this time of its fiscal year.

Apple CEO Tim Cook and CFO Luca Maestri will discuss the company's financial results on a conference call at 2:00 p.m. Pacific Time. MacRumors.com will transcribe the call as it unfolds for those unable to listen.

Article Link: Apple Expected to Report Strong Earnings Today, But Unlikely to Set Record-Breaking Quarter

 

[The Igloo]

yea ok thats all good but where is my god dang new Mac Mini!!!

 

[meaning-matters]

Let's see what happens once the pipeline delivers.

 

[2457244]

Are we totally insane?

After years of Apple rumours about new products and updates, now the Wall Street guys are also rumouring about the billions?
Damn, I wish I had diarrhea this morning!

 

[Nimrad]

"I can't believe they're focusing on doing earnings reports when they should make their accountants and finance people work on a new Mac Pro, Mac Mini etc."
hehehehehe

 

[Abazigal]

Spoiler - Apple (still) makes a ton of cash. People complain about the lack of a new Mac Pro.

 

[Michaelgtrusa]

"I can't believe they're focusing on doing earnings reports when they should make their accountants and finance people work on a new Mac Pro, Mac Mini etc."
hehehehehe

Only product people can make a new Mac Pro.
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yea ok thats all good but where is my god dang new Mac Mini!!!

Profit is the new product line.

 

[ryanwarsaw]

Time for Tim to tender his resignation and step down gracefully. What Apple needs is a true visionary like Steven Anthony Ballmer at the helm.
[doublepost=1493725217][/doublepost]

Only product people can make a new Mac Pro.
[doublepost=1493724801][/doublepost]
Profit is the new product line.

Well the Macpro is made in the USA after all.

 

[andy.ringwood]

Quarter of a trillion... damn.

 

[Chupa Chupa]

Kind of a bittersweet quarter. Very happy as a shareholder. This is usually a quiet quarter so for Apple to beat revenue and maintain margins is exciting and comforting, especially when Apple released zero products of significance this quarter. (Yes, slicing Air off the iPad and tweaking the 6SE are marginal meant to keep those products from completely sliding off the cliff).

As a tech fan I lament much of this profit is from services. Guessing it's mostly from ApplePay as more and more retailers worldwide start accepting it and Apple Music, the other area in services where there is fast growth potential. I have a feeling this year's WWDC more than any other in the TC era is going to give us a huge hint at where he see's Apple trending in the next few years and how much more we can expect Apple to latch onto subscription services.

 

[JaylenFast]

And people wonder why they are not focusing on the Mac (or the iPad for that matter)...

 

[thekeyring]

I think the growth thing is an interesting one. After all: take a company like Facebook. Initially, growth in user base is excellent news, because it shows the product is popular. But what happens when everyone has Facebook? Is no growth disaster for the company?

I'm not saying Apple has no room to grow. Clearly it's marketshare shows there are lots of people who buy phones that aren't iPhones, watches that aren't Apple Watches, etc.

 

[BvizioN]

yea ok thats all good but where is my god dang new Mac Mini!!!

I was wondering how quick will it be for someone to mention the Mac thingy. Wasn't expected to be the first comment.

 

[otternonsense]

"It was our best quarter ever for services"
"Services are becoming a larger part of our business"
"Best quarter ever for the Watch"
"Strongest pipeline ever"
" ..crickets... Mac ...crickets... Touch bar"

Tim Cook could just dictate his template responses to Siri and have her pick up the call instead, while he and Jony Ive are busy playing Crossy Road on the iPad SE.

 

[thekeyring]

As we've seen in earlier reports, Apple sales are stabilising. But let's see what happens once new products pop out the pipeline.

Exactly. Apple are doing very well considering nearly everything they sell is in need of an update!

I'm not trying to criticise them, but there were fears in 2012 after the iPhone 5 was announced "What can Apple actually do to make the smartphone experience any better? How will it sell any more?!"

Now, most people here can name at least one thing about each product which would improve them significantly, and would cause them to upgrade.

 

[RuffyYoshi]

Well I just bought 2 iPads for my parents along with smart covers, so wink wink, you're welcome Timmy.
For the record they're still great despite not being Pro models.

 

[TallManNY]

Only product people can make a new Mac Pro.
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Actuallly, if you watched a few Hackintosh videos, I think pretty much any smart person who put their mind to it could make a new Mac Pro. The accountants are smart. Give a group of them a modest budget and six months and I'm pretty sure they could come out with a Mac Pro which can mount modern graphics cards.

 

[thekeyring]

"It was our best quarter ever for services"
"Services are becoming a larger part of our business"
"Best quarter ever for the Watch"
"Strongest pipeline ever"
" ..crickets... Mac ...crickets... Touch bar"

Tim Cook could just dictate his template responses to Siri and have her pick up the call instead, while he and Jony Ive are busy playing Crossy Road on the iPad SE.

Are you saying the CEO of Apple mentioning the fastest growing area of the business on an earnings call is a mistake? Would you have criticised Tim Cook for going on and on about the iPhone while that was growing rapidly?

 

[mantan]

Always love when the earnings reports come out and Apple customers cheer like they've won something. Apple remains insanely profitable while charging them a premium for increasingly stale/mediocre products and we jump up and down and clap for them.

It was a lot easier to pay an Apple tax when their products were superior to everything on the market.

 

[mejsric]

im sure one of them predict it near.

 

[thettareddast]

Always love when the earnings reports come out and Apple customers cheer like they've won something. Apple remains insanely profitable while charging them a premium for increasingly stale/mediocre products and we jump up and down and clap for them.

It was a lot easier to pay an Apple tax when their products were superior to everything on the market.

Buy your shares and take part in the winning.

 

[TallManNY]

With tax repatriation very much on the table I wonder if Apple will hold back on updating its capital return program. I am expecting Congress to pass some tax reform of some sort and it will include repatriation. Persononally I'm hoping for a $100 billion one-time dividend associated with that repatriation. That would be an amazing moment in corporate history. And it would stimulate the U.S. economy (not as much as Republicans may hope, but it would do something).
[doublepost=1493727500][/doublepost]

Always love when the earnings reports come out and Apple customers cheer like they've won something. Apple remains insanely profitable while charging them a premium for increasingly stale/mediocre products and we jump up and down and clap for them.

It was a lot easier to pay an Apple tax when their products were superior to everything on the market.

The OS is still vastly superior to Windows and somewhat superior to Android. The premium is well worth it in my opinion.

Anyway, on these threads many of us are shareholders. And because of the stock growth over the years a lot of us have a sizable chunk of our net wealth in Apple shares.

 

[HobeSoundDarryl]

Seems like the good OP story should have somewhat balanced the presentation of record cash with at least some reference to Apple's ever-increasing debt number too. Only a few years ago, Apple had no debt and was cash-rich. Now Apple is cash rich-ER but also piling up debt at the same time.

That's not saying that debt is bad or good here- just pointing out that the cash hoard is not the whole story when it comes to Apple's finances. If you are unaware of Apple's debt, you might want to look it up. It's not exactly chump change. And a "WOW!" number like the projected $250B is not subtracting it out in spite of it being real money that Apple owes.

Even an average Joe's finances can look good inside their own little bubble if they only talk up income and savings while excluding debt. I suspect many Americans are actually quite rich if their own financial picture is spun without referencing their debt loads. More extreme example: The U.S. government is spectacularly, ridiculously rich in income and cash if allowed to ignore government debts.

 

[kazmac]

Well they got an iPhone 7+ and accessories out of me this quarter (the iPad Pro went back this morning. Just not an iPad person, pencil or no. I'll go back to drawing/sketching traditionally and taking pictures.)

When they release new Macs I will pay closer attention to the earnings.

 

[amirite]

I think the growth thing is an interesting one. After all: take a company like Facebook. Initially, growth in user base is excellent news, because it shows the product is popular. But what happens when everyone has Facebook? Is no growth disaster for the company?

I'm not saying Apple has no room to grow. Clearly it's marketshare shows there are lots of people who buy phones that aren't iPhones, watches that aren't Apple Watches, etc.

Facebook can grow in more important metrics besides users. Revenue for one.