Apple may disappoint investors tomorrow with fiscal fourth-quarter results that show weaker sales of its key iPad and iPhone product lines.
Wall Street is expecting Apple to report $36.27 billion in sales, with earnings per share of $8.91. Apple's own forecast for the quarter is $34 billion, with earnings per share of $7.65. Much of that tally is expected to come from the iPhone and iPad, which together made up 72 percent of the company's revenue last quarter.
This is the first quarter to include sales of Apple's iPhone 5, but only a few days' worth. The iPhone 5 launched September 21, and Apple's fourth quarter ended September 29. We already know Apple sold 5 million phones in its first weekend, so tomorrow's numbers will fill in the remaining days; Apple, however, does not break down its iPhone sales by model.
Analysts expect Apple to have sold a little more than 25 million iPhones during the entire quarter. That would be close to the same number Apple sold in the previous quarter, and up around 46 percent from the same period last year. One thing to keep in mind on that front is that last year's iPhone 4S debuted in October, which was well into Apple's first quarter of 2012.
As for the iPad, Apple actually provided an early peek into its tablet numbers during yesterday's iPad Mini unveiling, saying it has sold 100 million iPads cumulatively. In a note this morning, Sterne Agee analyst Shaw Wu noted that this puts Apple's tally for the quarter below 16 million.
"This is consistent with our supplier checks indicating lower build plans ahead of iPad Mini," Wu said. "To be conservative, we are trimming our estimate to 15.8 million units."
By comparison, Wu said Wall Street is expecting somewhere in the 17 million to 18 million range, figures that Fortune today notes have been trimmed by a number of other analysts into the 15 million to 16 million range.
As for Apple's other products, the company is expected to sell just over 5 million Macs during the quarter, up from the 4.89 million it sold during the same quarter last year. Expect most of that to come from Apple's portable side, given that Apple refreshed its MacBook Air and Pro lines in June. iPods, meanwhile, are expected to come in at 5.6 million units, which would be about an 18 percent decline from the same quarter last year.
This quarter "does not matter"
One thing to keep in mind is that some analysts are largely looking ahead to the next quarter, given changes to Apple's product cycle.
"Our view is that September quarter numbers do not matter," JP Morgan's Mark Moskowitz said in a note sent out to investors today. "Apple can miss or beat. It does not matter."
Moskowitz points to the launches of the iPhone 5 and the iPad Mini as things that make this a "transitory" quarter on the way to a giant next quarter.
"In our view, the two important iPhone and iPad launches set the stage for big numbers to be reported in late January 2013 as relates to December quarter results," Moskowitz said.
Some other things to watch out for in earnings:
- Whether Apple breaks out iPhone 5 units among its iPhone numbers. This would typically get brought up in the earnings conference call with analysts in the afternoon.
- Talk of the iPhone 5 in India. Apple is rumored to be eyeing a launch there this month, with a new sales strategy that makes the device more widely available by selling outside of carriers.
- Questions on iPad Mini's cost. The new, smaller device, which was announced yesterday priced at $329 and up, has some people doubting whether consumers will bite at a device that costs, in some cases, twice as much as rival gadgets. Apple marketing chief Phil Schiller has already gone on the record defending the price, angling it as a premium device, though some analysts might have their doubts.
- How the market reacts. A number of tech companies have missed in recent days, including Google, Microsoft, and EMC. Meanwhile, Apple's stock has dropped about 12 percent in trading since passing $700 last month. Will an earnings surprise spur a surge?
Apple is expected to report its results tomorrow after the market closes, and the company will be holding a call with analysts at 2 p.m. Pacific, which CNET will cover live.