Apple CEO Tim Cook unveils the new iPhone 12.
Apple will report its financial income for the fourth quarter after the bell on Thursday.
Here’s what Wall Street expects, according to Refinitiv’s consensus estimates:
- EPS: $ 0.70
- Income: $ 63.7 billion
- Revenue from iPhone: $ 27.93 billion
- Revenues from services: $ 1
- Revenues from other products: $ 7.40 billion
- Revenue for Mac: $ 7.93 billion
- IPad revenue: $ 6.12 billion
- Gross profit: 38.1%
Investors will be looking to see if Apple offers guidance or a forecast for its first quarter in fiscal 2021, which ends in December.
As Apple’s fourth quarter ends in September and the new phones are only released this month, any forecast will be Apple’s first indication of how reliable iPhone 12 sales are expected to be.
Apple discontinued its traditional guidelines in February due to uncertainty created by the Covid-19 pandemic and has not released a forecast for the two quarters since.
“With just one week of new iPhone sales by the time earnings are reported at 10/29, we’re not sure AAPL will be comfortable with guidance,” Deutsche Bank analyst Jeriel Ong said this week.
The ongoing pandemic did not prevent Apple from reporting gains from the outbreak for the quarter ending in June, which hit past analyst estimates and included double-digit growth in both product and service segments.
In particular, sales of the iPad and Mac were significantly higher than expected by Wall Street, which Apple attributes to strong trends in home work. Investors will seek information from Apple CEO Tim Cook and Apple CFO Luca Maestri on whether Apple sees this trend continuing and whether it will boost recently announced products, such as the $ 599 iPad Air, which went on sale this year. month.
“Compared to short-term forecasts, we anticipate a short-term limit on iPhone volume forecasts, but we wouldn’t rule out upward next quarter through sustained wind trends from home-based / eLearning and wearable sales,” JPM analyst Samik Chatterjee wrote last month.
A few weeks of sales of the Apple Watch Series 6 will also be included in Apple’s fourth-quarter earnings. Apple unveiled its new range of Apple Watches in September.
Investors always pay close attention to Apple’s services business. Apple promised in 2017 to double its annual revenue from services by 2020 and said it had achieved its goal earlier this year.
Apple’s expanding business is a big reason why Apple’s stock has risen this year because it makes the iPhone maker look more like a software company that typically has higher odds than hardware makers.
But Apple’s services business has also faced regulatory scrutiny in recent months, and investors are looking for signs that it will continue to grow after years of strong growth. In July, Cook testified before the House of Antitrust Judiciary Subcommittee on his business practices about 30% of the fee charged for apps and in-app purchases sold in the iPhone App Store.
Most recently, the Justice Department case highlighted a business deal in which Apple sold Google the privilege of being the default search engine in the iPhone’s browser, which it said amounted to $ 12 billion a year. Apple calls this license revenue and is now under threat as attorneys general across the country call the deal anti-competitive.
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