Apple reports its quarterly earnings on Wednesday for the January to March quarter – a typically slow time for technology companies following the Christmas quarter crunch.
On its last earnings call in January, Apple told investors to expect revenue between $42 billion and $44 billion, gross margin between 37 percent and 38 percent, operating expenses between $4.3 billion and $4.4 billion, other income/(expense) of $200 million, and a tax rate of 26.2 percent. Really, no better than the company did last year.
Analysts have been checking with industry sources, looking at retail logs, and number crunching to predict what Apple will announce on Wednesday. Whether the company misses or beats the expectations could have a big impact on the stock price, which is up roughly 36 percent year-over-year. Last quarter, the stock tanked in after hours following a bad guidance for the numbers that are set to be report on Wednesday. Here’s what analysts are expecting:
Fortune’s Philip Elmer-DeWitt is usually the man to go before Apple earnings, and it’s no different this time. The business-connected journalist polled 37 analysts, and they aren’t expecting many surprises.
No surprises, that’s for sure. The average revenue estimate of the 37 analysts we’ve heard from so far — 14 amateurs and 23 pros — is 43.5 billion, just above the midpoint of Oppenheimer’s range. The amateurs, as usual, are a bit more bullish. They’re calling for earnings of $10.53 per share on sales of $43.66 billion. The pros are not far behind: earnings of $10.18 on sales of $43.42 billion.
In terms of device sales, analysts predicted last week that Apple will report second quarter iPhone sales for its fiscal year to be 38.19 million, just two percent up year-on-year. Apple’s deal with China Mobile is suspected to have helped these numbers. Furthermore, iPad sales are expected to be at 19.3 million, a potentially troubling decline of 0.7 percent year-over-year. Last year at this time, Apple saw iPad sales spike 55 percent compared to the year earlier.
Bernstein Research analyst Toni Sacconagh believes Apple will also announce on Wednesday that it plans to add $30 billion to its current stock repurchase plan, where it has already said $60 billion will be repurchased by the end of 2015.
“We expect Apple to announce a decision on incremental cash returns on its earnings call,” Sacconaghi said in a research report last week. “We believe that many (particularly value-oriented) shareholders are looking for Apple to provide a framework and commitment for capital return, such as a minimum percentage of ongoing free cash flow that would be returned to shareholders.”
Moving on to the June quarter, Piper Jaffray analyst Gene Munster expects Apple’s guidance to fall short yet again. He’s expecting revenue guidance of $35.5-$37.5 billion, a bit lower than the Wall Street consensus of $38.3 billion.
Apple will be holding a conference call with Tim Cook and Co. through a live webcast that will begin at 2pm PDT on Wednesday, April 23, 2014. iDownloadBlog will be watching the wires, to bring you numbers as soon as they hit.
Are analysts correct, or off the mark completely? You tell us.