Apple Quarter Earnings Expected Strong on iPad, iPhone Sales

By Reuters  |  Print this article Print

Apple is expected to announce strong earnings on sales of iPhone and iPad, even as the consumer spending environment remains weak.

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Apple, famous for its low-ball forecasts, stunned investors in July when it set a revenue outlook for September that was $1 billion higher than Wall Street's target.

The company has beat the consensus estimate in each of the past eight quarters by a minimum of 13 percent, and has bested revenue estimates for the past seven quarters.

Hargreaves said investors should expect another beat this time around. "I don't think it will be a big as what we've seen in the past, at least relative to our numbers, because of supply constraints early in the quarter," he said.

Apple is expected to post earnings of $4.08 a share on revenue of $18.9 billion, according to Thomson Reuters I/B/E/S.

According to StarMine's SmartEstimate, which places more weight on recent forecasts by top-rated analysts, Apple should post EPS of $4.17 on revenue of $19.1 billion.

Analysts expect a gross margin of 38.2 percent. Apple's margin has been pinched by the iPad, but falling prices for components like NAND flash, which Apple consumes in huge amounts, could help in the September quarter.

Wall Street expects Apple to report sales of roughly 10 million iPods and 3.5 million to 4 million Mac computers.

Macs have been a steady source of strength for Apple over the past few years. Sales surged 24 percent in the United States in the July-September period, according to industry tracker IDC, a far stronger performance that its rivals.

Apple could dominate the headlines next week. After its earnings report Monday comes a media event Wednesday focused on Mac computers. That is followed by quarterly results from AT&T, the exclusive U.S. iPhone carrier, and Verizon.

(Reporting by Gabriel Madway, editing by Matthew Lewis)