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Street’s consensus is $ 52.1 billion in revenue and profit of $ 2.09 per share.
Justin Sullivan / Getty Images
This could be the quarter that Apple‘s
earnings don’t really matter.
Well, okay, they matter. But the truth is that Apple investors (ticker: AAPL) are uniquely focused on the prospects for the company’s first iPhone 5G debut, which is expected sometime this fall. But when Apple reports its third-quarter tax results after the close of business on Thursday, the company almost certainly won’t provide clues as to the timing or anything about the new phones, which will presumably be known as the iPhone 12.
Apple has a long-standing policy of not discussing unannounced products, and at this point, despite the literally millions of words that have been written about the next generation of iPhones, Apple has not even acknowledged that they exist.
To make things a little more complicated, Apple is expected to avoid providing financial guidance for the current quarter ending September. Apple is grappling not only with uncertainties linked to the Covid-19 pandemic, but also with the timing of its launch event. Including even a couple of weeks of sales towards the end of the quarter would change the short-term outlook. And Apple has no real interest in hinting indirectly about the timing of the new phones through financial guidance.
For the quarter ending in June, the Street consensus is $ 52.1 billion in revenue and profit of $ 2.09 per share; Note that the company did not provide guidance for the quarter. For the record, Street’s consensus for the current quarter is $ 62 billion in revenue and profit of $ 2.81 per share. But with so much uncertainty, estimates vary widely, and sales estimates could be as high as $ 10 billion in either direction.
Meanwhile, the other wild card will be Wednesday’s virtual hearing before the House Judiciary Committee’s antitrust subcommittee that includes Apple CEO Tim Cook and leaders of Alphabet (GOOGL), Amazon (AMZN) and Facebook (FB). . Apple’s portion of the event is likely to focus on criticism of Apple’s 30% commission from app sales and related subscription revenue through the App Store. Surely there will be questions in the analyst’s call Thursday about what happens in the audience.
There are a few other things to watch on Thursday, including an update to the company’s stock buyback program, the performance of Apple’s services and Wearables businesses, and the state of the company’s partially reopened retail stores.
RBC Capital’s Robert Mueller says the quarter will be “of limited importance” for the long-term view of the shares, given the likely lack of information on 5G iPhones. “Services and the iPhone SE could serve as bright spots in a challenging Covid-19 quarter; however, we remain focused on launching the next generation, ”he writes. Mueller maintains its Outperform rating and its price target of $ 390.
Wedbush analyst Dan Ives agrees that what really matters to Apple from here is the arrival of the new iPhones. “At the end of the day, Apple’s growth story (and stocks) move higher, it all rests on the iPhone 12 ‘supercycle’, which we believe is the most significant product cycle Cupertino has seen since launch. of the iPhone 6 in 2014. “It maintains its top performance rating and its $ 450 price target.
Cowen’s Krish Sankar, who has a top performance rating and a target of $ 400 in Apple stock, writes in a preliminary note that “owning Apple stock here is not about the quarterly results / outlook on this call; it’s about of the long-term Services growth opportunity and the upcoming iPhone 5G cycle. The Services segment remains a bright spot, and Mac demand could see a boost in the back-to-school period. “
Apple shares fell 0.9% to $ 375.84 on Tuesday afternoon. The S&P 500 was more or less flat. The stock has risen approximately 30% year to date.
Write to Eric J. Savitz at [email protected]
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