Apple is expected to post strong fiscal third-quarter earnings tomorrow, fueled by sales of Mac computers and iPhones, both of which are expected to get refreshed soon.
Thomson Reuters First Call consensus says Apple will once again outperform its own guidance with $24.75 billion in revenue, and earnings per share of $5.73. That's compared to the $23 billion in revenue and earnings per share of $5.03 offered up by Apple's chief financial officer, Peter Oppenheimer, when announcing the company's second-quarter results in April.
Apple's stock closed at an all-time high at the end of last week, hitting $364.92. The stock is currently in the $374 range in after-hours trading, presumably on expectations of Apple announcing a killer quarter tomorrow.
Here are some things to watch for (by product):
Apple sold 18.65 million iPhones in its fiscal second quarter, accounting for a little more than half the company's revenue during the quarter. Some analysts are expecting that number to have edged even higher in this quarter, despite this being the time of year when Apple typically introduces a new iPhone model.
JP Morgan's Mark Moskowitz last week put the firm's estimates of Apple's June quarter sales as hitting 19.6 million units sold, which would be up nearly a million units from the last quarter, and a more impressive 11.2 million units compared with the same quarter a year ago. (Note: the iPhone tally now takes into account CDMA models of the device, which Apple only began offering to customers in February.) Fortune's polling of analysts from last week (which includes Moskowitz) puts the average of Apple's fiscal third-quarter iPhone sales at 16.9 million, with most hovering in the 16 million to 17 million range.
During the call expect analysts to ask the question they know won't get answered: when we'll see a follow-up to the iPhone 4, which is now more than a year old and thus overdue (by Apple's typical schedule) for an update.
This is the first quarter where we really get to see how well the iPad 2's been pushing sales in a tablet market that's become increasingly crowded. Apple's previous quarterly earnings accounted for just two weeks of sales that included the newer model, which went on sale in early March.
Using the same polling method used for tracking iPhone estimates, Fortune has 39 analysts pegging the iPad sales average around 7.93 million units for the quarter. That's compared to the 3.27 million units sold during the same quarter a year ago (which was the first quarter to include the iPad), and 4.69 million units in the company's fiscal second quarter.
Apple seems to have just now caught up with demand for the device, with PCMag reporting this past weekend that ship times have dropped down to one to three days for the first time since release. At the height of demand, which was just a few weeks after release, the company was taking more than a month to fulfill orders and get iPads on their way.
During the quarter, the iPad got competition from a handful of new tablets, like Acer's Iconia Tab, the Asus Eee Pad Transformer, the BlackBerry PlayBook, the HTC Flyer, and the 7- and 10-inch models of Samsung's Galaxy Tab. Expect analysts to poke Apple for a take on the competition, which will soon include Microsoft's Windows 8. During the quarter Microsoft took the wraps off how it intends to fit the software, which will run on ARM processors, into tablets better than it's done with previous versions of the OS.
As noted last week by Fortune's Philip Elmer-Dewitt, sales of the iPod have been on the decline since hitting a peak in 2008. According to 43 analysts the outlet polled to get an estimate on how much Apple's iPod sales would drop during this quarter (which has historically been a slow one given the company's September refresh and holiday sales push), the consensus was sales of 8.39 million units. That represents a 7.2 percent drop from the same quarter in 2010.
This time last year, Apple set a new quarterly record with 3.47 million Macs sold. An estimate from brokerage BGC Partners pegs Apple at selling 4 million units during the quarter, due in part to what the group says is first-time buyers picking up a Mac after buying an iPhone, iPod, or iPad.
"The halo effect from the iPhone, iPod, and iPad is driving new users into Macintosh computers as seen by the company citing that one out of two Macintosh computers sold in Apple stores are to new users," said BGC technology analyst Colin Gilis in a note this morning."Computer sales are a key driver for Apple's results as the items command high selling prices and there is ample room to take market share."
Apple COO Tim Cook said something similar in the previous quarter's earnings call, though he was making mention of the iPad driving sales of the Mac to enterprise buyers.
During the quarter, the only Mac to be upgraded was the iMac. Apple introduced new versions of the all-in-one desktop with Thunderbolt I/O technology and faster Intel processors in May.
Miscellaneous things to keep an eye out for:
The next major version of Apple's Mac OS is widely expected to be released later this week. While the company is unlikely to spend time taking focus away from the numbers by announcing a release date, expect analysts to press the company's executives on it during the conference call.
Expect another question about Samsung. The topic was broached in the Q2 earnings call, which was less than a week after Apple filed suit against the company for "copying" its devices. Since then Samsung's sued Apple back, and the two have traded numerous blows in court.
Patent talk. Apple's a part of a consortium that paid $4.5 billion for 6,000 patents and patent applications from Nortel's auction last month. That sale was technically made after Apple's fiscal third quarter, but there could be questions about Apple's stake in that purchase.
Expect another question about Apple CEO Steve Jobs' health. Jobs remains on medical leave from the company. Despite announcing that change in January, Jobs gave the keynote address at the iPad 2 unveiling in March and at WWDC in early June.
Stay tuned for a full breakdown of Apple's third-quarter earnings, which hit tomorrow around 1:30 p.m. PT. We'll also be running a live blog of the company's conference call at 2 p.m. PT, which you'll be able to keep track of right from the earnings story.
Updated at 5:25 p.m. PT to correct reference of Fortune in the iPod section.