“Investor anxiety heading into Apple’s upcoming earnings report is at a multi-year high. Fears surrounding slowing iPhone 6s and 6s Plus sales have morphed into broad questions about the iPhone’s long-term viability,” Neil Cybart writes for Above Avalon. “While investors are looking for answers that won’t likely be provided this week, management has a very clear goal with its 1Q16 earnings report and conference call: set expectations for 2016.”
“On Apple’s previous earnings call, Tim Cook discussed his expectation that iPhone sales would increase year-over-year during 1Q16 on a both a revenue and unit sales basis,” Cybart writes. “Since this unofficial guidance was provided nearly one month into the quarter, it would have taken quite the unexpected slowdown in iPhone shipments for Apple to report anything less than 74 million units. ”
“Apple’s 2Q16 may end up representing the weakest quarter of the year. Accordingly, it should not be a surprise if Apple guides to a year-over-year decline in revenues,” Cybart writes. “Given that Apple beat its 2Q15 revenue guidance of $52 billion to $55 billion by a sizable amount last year, that same range may end up being a realistic target for Apple’s 2Q16 revenue guidance.”
Much more, including Cybart’s Apple Watch unit sales estimates, in the full article here.
MacDailyNews Note: As usual, we expect earnings results after market close, right around 1:30pm PDT / 4:30pm EDT tomorrow, January 26th.
We’ll bring you the results as soon as they are available and follow that up with live notes from Apple’s conference call. Check our home page around 4:30pm EDT for the results and around 4:45pm EDT for the link to our live coverage. You can listen to Apple’s conference call live via this link on January 26th here.
On October 27, 2015, Apple provided the following guidance for their fiscal 2016 first quarter:
• revenue between $75.5 billion and $77.5 billion
• gross margin between 39 percent and 40 percent
• operating expenses between $6.3 billion and $6.4 billion
• other income/(expense) of $400 million
• tax rate of 26.2 percent
What to look for in Apple’s earnings report tomorrow – January 25, 2016
Apple to release Q116 earnings, webcast live conference call on January 26th – January 22, 2016