Chuck Jones: Apple’s Q214 results nothing to get excited about

“Apple is scheduled to release its March quarter results after the close on Wednesday, March 23,” Chuck Jones writes for Forbes. “It appears from my modeling that Apple is on track to be just above the mid-point of its revenue guidance and at the high-end of EPS when using its various guidance metrics and before it bought back $14 billion in shares in late January and early February.”

“Apple disappointed the Street in January when it fell short to iPhone shipments and March quarter guidance was below expectations,” Jones writes. “I have modeled iPhones and iPads to decline sequentially more than normal which are partially offset by gross margin a bit above the mid-point of guidance and share count decreasing more than what I believe Apple management was using since they didn’t know they would be buying back such a large amount of stock in the quarter ($14 billon for almost 28 million shares).”

“Apple guided revenue to come in between $42 and $44 billion vs. $43.6 billion a year ago,” Jones writes. “I am estimating that the company generated $43.3 billion in revenue, down less than 1% year over year, and the Street is at $43.6 billion… I am expecting gross margins to decline sequentially by 20 basis points from 37.9% to 37.7%… [For EPS] I am estimating $10.30 vs. an actual of $10.09 a year ago. The Street is at $10.15 and has been creeping up about a penny a week the past two weeks. While EPS is projected to increase year over year the company’s operating income is projected to decline from $12.6 billion to $12.0 billion in the just completed quarter.”

Much more in the full article here.

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