“Apple Inc. shares have soared 44 percent this year, in part due to anticipation for the most important new product from the company in years, the iPhone X. Whether that rally can continue will hinge on what Apple forecasts for sales of the device this holiday,” Julie Verhage and Mark Gurman report for Bloomberg. “That’s one of the questions analysts and investors will be asking when Apple reports fiscal fourth-quarter results after the close of trading on Thursday.”
1. The impact of the iPhone X: On Thursday, the company will shed light on this when it forecasts revenue and gross profit margins for the three months through December. Analysts predict revenue of $85 billion and a gross margin of 38.5 percent, according to data compiled by Bloomberg. If Apple forecasts higher revenue and fatter margins, that would suggest it has a lot of iPhone X devices to sell in the period. The opposite may show production issues really will make people wait.
2. The meaning of a more expensive phone: Apple likely won’t forecast ASPs for the holiday quarter, however, analysts estimate just over 80 million total iPhones will be sold in that period, with an ASP of $729, according to estimates compiled by Bloomberg.
3. China: In the third quarter, Greater China was Apple’s only major region to see a revenue decline. Analysts, however, are optimistic that the iPhone X will be a hit with Chinese consumers, boosting revenue from the region in coming quarters.
4. iPhone mix: Our bet is that Apple will address the critical iPhone X demand question and direct investors to think about iPhone X demand as similar to iPhone 8 — Gene Munster, Loup Ventures, wrote in a recent not to clients.
5. Apple’s other products
Read more in the full article here.
MacDailyNews Take: As usual, it’ll be mostly about the guidance for the all-important holiday quarter.
As for today’s results, on August 1, 2017, Apple provided the following guidance for Q417:
• revenue between $49 billion and $52 billion
• gross margin between 37.5 percent and 38 percent
• operating expenses between $6.7 billion and $6.8 billion
• other income/(expense) of $500 million
• tax rate of 25.5 percent
Apple to release Q417 earnings, webcast live conference call on November 2nd – October 3, 2017