Apple Expected to Report Best-Ever Second Quarter Today With Anticipated Clues About iPhone X Sales

[MacRumors]

Apple is set to report its earnings results for the second quarter of its 2018 fiscal year at 1:30 p.m. Pacific Time today.

The quarter began December 31, 2017 and ended March 31, 2018, according to Apple's fiscal year accounting calendar.

Apple provided the following guidance for the quarter back on February 1:revenue between $60 billion and $62 billion
gross margin between 38 and 38.5 percent
operating expenses between $7.6 billion and $7.7 billion
other income/expense of $300 million
tax rate of approximately 15 percentApple's guidance suggests the company will report its best second quarter results ever, topping its previous record of $58 billion:
2014: $45.6 billion
2015: $58.0 billion
2016: $50.6 billion
2017: $52.9 billion
2018: $60+ billion
Wall Street analysts forecast that Apple will report $60.9 billion revenue, meeting roughly the midpoint of its guidance, and earnings per share of $2.69, according to over 30 estimates averaged by Yahoo Finance.

MacRumors has compiled second quarter revenue and EPS estimates from a handful of Apple-focused analysts:

Key Takeaways and What to Look For
Apple is expected to report iPhone unit sales of 51.9 million, a roughly two percent increase over 50.8 million in the year-ago quarter, according to average analyst estimates compiled by Bloomberg.
Apple doesn't break out iPhone sales on a model-by-model basis, but the iPhone's average selling price should reveal whether there's any truth to reports that iPhone X sales have slowed significantly. iPhone ASP was $796 last quarter, up from $695 a year earlier.
Of increasing importance is continued growth of Apple's services category, including the App Store, Apple Music, iCloud, iTunes, Apple Pay, and AppleCare. The average analyst estimate is around $8.3 billion, according to Gene Munster, up from $7.04 billion in the year-ago quarter.
With increasing competition from Huawei, Vivo, and Oppo, Apple's performance in Greater China will be a focus. Apple reported revenue of $10.4 billion in the region in the year-ago quarter.
Apple said it would provide an update on its capital return program during today's conference call, and many analysts expect significant increases, given the company's plans to repatriate an estimated $250+ billion in overseas cash under new tax laws in the United States.
Apple's third quarter guidance will set expectations for April-June, which has historically been the slowest period of the company's fiscal year. The average revenue estimate is currently $52.04 billion, according to Yahoo Finance, which would top $45.4 billion in the year-ago quarter.
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 loosely transcribe the one-hour call as it happens.

Article Link: Apple Expected to Report Best-Ever Second Quarter Today With Anticipated Clues About iPhone X Sales

 

[tigres]

And in other news, Reuters and other sources are claiming doom re: today's earnings call.

 

[Ramchi]

Thanks Homepod for filling the gap!!???

 

[Baymowe335]

Hope everyone is ready to see Apple is doing quite well.

 

[opeter]

Wait, isn't today 1st May? I mean...
International Workers' Day

The workers should have a free day.

 

[thenewyorkgod]

so. much. money

 

[5105973]

Hope everyone is ready to see Apple is doing quite well.

I’m neither ready nor unready. They aren’t giving me any of those billions. I also don’t own any of their stock. I’m just the idle curious up in the peanut gallery.

 

[WWPD]

I really hope Apple can pull through, I like to root for the underdogs.

 

[nviz22]

I hope the X gets priced down because $1000 USD is too much for a marginal upgraded smartphone. TSMC already reported they have excess iPhone X parts because Apple stopped ordering them.

 

[mtneer]

BGR and others in the media reporting doom, MR reporting a record breaking quarter. Not sure who to believe!

 

[Baymowe335]

I’m neither ready nor unready. They aren’t giving me any of those billions. I also don’t own any of their stock. I’m just the idle curious up in the peanut gallery.

You should buy some of the company. They are going to give many billions back today when they update their capital return program.
[doublepost=1525185543][/doublepost]

I hope the X gets priced down because $1000 USD is too much for a marginal upgraded smartphone. TSMC already reported they have excess iPhone X parts because Apple stopped ordering them.

Don't read headlines to form your opinion. The TSMC results were not nearly as bad in general and for Apple as reported.

It's very difficult to use reports of other companies to infer anything about Apple. Proven time and time again.

 

[pete2106]

It's interesting to see that despite the big push into services and how much they're making, they are still a small fraction of overall revenue.

 

[euchanels]

And so quickly they changin their tune. Every year such tech companies have done their fair share in reporting the doom of iPhone, now that they know the results are near, now suddenly they wanna cover their tracks.

 

[Joe Rossignol]

BGR and others in the media reporting doom, MR reporting a record breaking quarter. Not sure who to believe!

Apple's record for the second quarter is $58B. It would need to miss the low-end of its $60-$62B guidance by $2B not to set a record.

I can't remember the last time Apple didn't meet its guidance.

 

[dumastudetto]

I’ve got four words for you:
I.
Love.
This.
Company.

 

[indiekiduk]

It's a shame they have abandoned the Mac but I'm not worried because they have likely made crazy profits off the iPhone X

 

[bluecoast]

I’ve got four words for you:
I.
Love.
This.
Company.

Developers, developers, developers!

 

[Doomtomb]

What's with Mark Moskowitz?

If he's right, nobody's gonna come by and pat him on the back, people will instead be up and arms about how Apple could've missed their own guidance and the analysts' predictions.

What I'm saying: Bad news doesn't receive praise, even when it's right.

 

[Baymowe335]

Developers, developers, developers!

This is not Microsoft.

 

[DocMultimedia]

Dividend increase. How much? That's all I want to hear.

 

[Joe Rossignol]

What's with Mark Moskowitz?

If he's right, nobody's gonna come by and pat him on the back, people will instead be up and arms about how Apple could've missed their own guidance and the analysts' predictions.

What I'm saying: Bad news doesn't receive praise, even when it's right.

For what it's worth, he came in low with an $85.4 billion estimate last quarter too. Apple reported $88.3 billion.

He remains pretty bearish on AAPL obviously. $57.8 billion would be a huge miss.

 

[m0sher]

Guess the X wasn’t a flop like some editorials will have us believe regarding the success of sales and contribution.

 

[Rogifan]

I’ve never seen another company that generates so much noise around earnings. Every quarter Wall Street is in a panic about Apple. And it’s always that the next quarter is going to be bad. So last earnings call Wall Street was panicked about the March quarter. Now they’re panicked about June. And two months from now they’ll be panicked about September. What other company (tech or not) continuously has Wall Street panicked the way Apple does. I can’t think of one.

 

[Baymowe335]

For what it's worth, he came in low with an $85.4 billion estimate last quarter too. Apple reported $88.3 billion.

He remains pretty bearish on AAPL obviously. $57.8 billion would be a huge miss.

$57.8B is just terrible analysis. It won't happen, period.
[doublepost=1525188166][/doublepost]

Dividend increase. How much? That's all I want to hear.

More like buybacks. Dividends are taxed and don't create long the long term value of buybacks. If they do ~$2.70/share, that's up from $2.10/share y/y and a huge reason will be buybacks.

Apple shares are super cheap and buying them back aggressively is something I'd support as a use of capital.

 

[78Bandit]

Q1/18 revenue was up about 18% over comparable quarters from FY15 & 16. FY17 was an outlier as you had a 14-week quarter. If Apple was to keep up that revenue growth you would need Q2 revenue of about $64B so the consensus of $60B is somewhat of a letdown given the anticipated "supercycle" of upgrades that were supposed to drive record numbers of iPhones all the way through at least March.

Q3 results for the past three years are in the $45B range so 18% revenue growth would need Q3/18 to be $53B to stay on track.

Record revenues are fine, but ultimately ASP growth will only take you so far. The iPhone unit sales are stagnating or even starting to fall. It also looks like the heady growth of the first quarter isn't going to continue for the remainder of the year.