What to Expect From Apple's Third Quarter Earnings Results Today

[MacRumors]

Apple today will release its fiscal third quarter earnings results, reflecting a three-month period that ended in late June, and the consensus among analysts is that the company will report a second consecutive decline in iPhone sales and overall revenue. That same scenario played out last quarter for the first time since 2003.

In fact, some analysts have forecasted that iPhone sales may be as low as 38 million to 40 million units, a decline of up to 20 percent compared to the year-ago quarter. If the estimates prove to be accurate, it would mark Apple's worst quarter of iPhone growth ever in the smartphone's nine-year history.

Apple itself provided guidance of between $41 billion and $43 billion in revenue, which would be up to 18 percent lower than the $49.6 billion in revenue it posted in the year-ago quarter. Wall Street expects revenue to be around the $42.1 billion mark, with earnings of $1.39 a share -- one analyst has EPS as low as $1.35.

iPhone accounts for around two-thirds of Apple's revenue, and an even greater portion of its profits, so the device's recent slide is concerning for investors -- reflected in the price of Apple shares, down around 21 percent from a 52-week high of $123.91. The good news for Apple is that many analysts believe it will "bottom out" in the June quarter and return to iPhone and revenue growth by the 2017 fiscal year.

But, until then, the bleeding is expected to continue. iPad sales are forecasted to decline for a tenth consecutive quarter, while market research firm IDC's estimated Apple Watch sales of 1.6 million in the June quarter would be 55 percent lower than the year-ago launch quarter. Mac sales are also projected to decline by up to 10 percent as buyers await a 2016 MacBook Pro and other new models.

As emphasized by Apple CEO Tim Cook, the recent decline in Apple's hardware sales has been offset by growth in the company's expanding services category, including the likes of Apple Music, Apple Pay, AppleCare, and licensing. That trend looks set to continue, as Above Avalon analyst Neil Cybart forecasts service revenue was $6.1 billion in the June quarter for 20 percent year-over-year growth.

Beyond the third quarter, attention has turned to tempered expectations surrounding the upcoming iPhone 7. The consensus among analysts is that a perceived lack of new features coming to the next-generation smartphone could result in a "mega upgrade cycle" for the so-called iPhone 8 rumored for 2017. Next year's model is already rumored to feature a new design with an OLED display and glass casing.

Apple will publish its third quarter earnings report at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time), and we will share the results shortly thereafter. MacRumors will then provide live coverage of the ensuing conference call with Cook and Apple CFO Luca Maestri at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

Article Link: What to Expect From Apple's Third Quarter Earnings Results Today

 

[Mad Mac Maniac]

This is going to be a far worse quarter for Apple than the previous one... the only bright spot may be the iPhone SE. I expect them to talk that up.

 

[MikeSmoke]

I bought a 6s in June. Did my part to bump the numbers

 

[asfdasdf]

What I expect is to make a pair of bucks with my short position. AAPL is dead money at least until the iPhone 8. Tim Cook I The Obtuse wants people to believe that they're diversifying into services. Go figure, if people stop buying iPhones, they will need Apple's services... sure mate, cool story.

 

[ThunderSkunk]

make the full size os x tablet already

 

[8692574]

And down we go..........the rollercoaster just started!

 

[djcerla]

This is going to be a far worse quarter for Apple than the previous one... the only bright spot may be the iPhone SE. I expect them to talk that up.

How can it be "far worse" if they haven't warned? It will be in the guidance range.

Services revenues ballooning is not a sweet spot? They're bigger than Facebook, alone.

If anything, this is a perfect, school-book setup for a beat.

EDIT: spot on

 

[TheShadowKnows!]

"What goes up must come down"

Gravity rules. No exceptions, even in Cupertino.

 

[m.x]

No surprises here. When you only refresh one computer in the last year (more likely in the last >365 days!), when you raise the price of the iPad just by adding a "pro" to the name and by adding the compatibility with accessories which also have to be bought separately, when you leave people uncertain about some product lines (iPad mini, Mac Pro, Mac Mini), then numbers wink go down... Give us great products and we will buy them, it is sooooo easy !

 

[shaunymac]

Hmm, I guess I'll prepare to lose some $'s. I really should take away the last bit of emotion o have left for Apple and asses the stock that way. I've probably kept it past its shelf life in my portfolio.

 

[keysofanxiety]

"What goes up must come down"

Gravity rules. No exceptions, even in Cupertino.

If forces of nature happened to be the main influence on a company's earnings report, you'd be completely right.

 

[Aldaris]

What I expect is to make a pair of bucks with my short position. AAPL is dead money at least until the iPhone 8. Tim Cook I The Obtuse wants people to believe that they're diversifying into services. Go figure, if people stop buying iPhones, they will need Apple's services... sure mate, cool story.

Exactly the issue with the slump in Mac updates/releases. iPhone was a gateway drug, but they have shifted their focus to the idrugs more than macs, causing their customer base to move into different directions.

 

[ArtOfWarfare]

"What goes up must come down"

Gravity rules. No exceptions, even in Cupertino.

I would say that you can go up in a way that the coming down part doesn't have to occur for billions of years.

IE, as we begin to spread into the stars, I think the human population might just continue to go up and up, until maybe the heat death of the universe forces us to stop.

 

[sk1wbw]

Maybe if that idiot Tim Cook spent more time on the product line up and making it better instead of being a social justice warrior, things would have been in the positive. But that's just my opinion.

 

[MacLawyer]

Those who have shorted AAPL are feeling good.

 

[blacktape242]

Maybe if that idiot Tim Cook spent more time on the product line up and making it better instead of being a social justice warrior, things would have been in the positive. But that's just my opinion.

amen to that!!!!!!!

 

[DocMultimedia]

Ugh. This one scares me. It will entirely depend on what they predict for next quarter, and nothing to do with how many billions they made in pure profit this quarter. At least dividends continue to roll in...and increase yearly. Hope the next increase will be a big one.

 

[TranceJD]

iOS needs stability. It seems like we only have a stable iOS version for half of the year. September - January they are still ironing out bugs from the new release, but February - August everything is stable. I'm tired of it. Please don't release iOS 10 until it is as stable as iOS 9.3!

 

[EricTheHalfBee]

What to expect? A bunch of fake Apple users proclaiming Apple is doomed, Tim Cook should be fired, and telling everyone who will listen how Android is better and they're going to buy a Samsung phone because Apple has let them down.

 

[nt5672]

Lets see how many magazine covers and awards Tim Cook gets now. Just like in high school, popularity is fleeting when you have nothing to back it up.

 

[dumastudetto]

I'm very bullish on AAPL moving forward. We're looking at a massive product refresh in the next few months, and there is huge anticipation and demand for updates to the Mac line, iPhone, Apple Watch and maybe even iPad.

Apple's best days are still ahead.

 

[keysofanxiety]

Lets see how many magazine covers and awards Tim Cook gets now. Just like in high school, popularity is fleeting when you have nothing to back it up.

Except, y'know, being CEO of the most valuable tech company in the world.

 

[SeanG1027]

If they aren't selling as much new hardware how can they count growth from AppleCare?

 

[asfdasdf]

I'm very bullish on AAPL moving forward. We're looking at a massive product refresh in the next few months, and there is huge anticipation and demand for updates to the Mac line, iPhone, Apple Watch and maybe even iPad.

Apple's best days are still ahead.

All that matters is: YoY iPhone growth, margins and iPhone ASP. Everything else is rubbish. If that goes down, AAPL goes down, simple as that. You've to be brave to buy AAPL now being a member here and knowing how the iPhone 7 looks, that's for sure.

 

[tampageek]

Take the name "Apple" off and what do you have? A company selling old tech on products that can't be upgraded or easily repaired - for top dollar. Add to that an OS that is buggy, and more dumbed-down and locked down with every new release. Any other company with a business model like that would have gone out of business by now.

To make matters worse Tim & Co seem to have forgotten that the  ecosystem drives product sales among devices. When only one of those products is keeping up with the competition, it doesn't take an PhD to figure out that one leg can't hold up a table. For a company with as much cash as apple, there is no excuse for ignoring every product line except iPhone.

Another problem is that AppleCare service seems to be slipping. This has always been a major selling point for me and often justified paying more for hardware. There are just too many bad decisions being made about what Apple is about these days. The only place to point the finger is at the boss. Placing the quest for profits to satisfy stockholders above all else is a VERY long way from the Steve Jobs business model.