Q3 Preview: It's Still All About Apple's (AAPL) iPhone, Buy Not the One You Think...

July 24, 2012 11:19 AM EDT
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Shares of Apple Inc. (Nasdaq: AAPL) are trading higher heading into the mobile device and media giant's third-quarter 2012 earnings report.

Expected out after the market closes Tuesday, the Street is looking for 30.6 percent top-line growth to $37.34 billion, from $28.6 billion reported in the same period last year.

Earnings should also improve 33 percent to $10.33 per share.

Estimize consensus numbers see EPS at $11.45 and revs of $39.25 billion.

In addition to top- and bottom-line numbers, the Street consensus, as compiled by Fortune, sees 28.94 million iPhones, 6.43 million iPods, 4.36 million Macs, and 15.64 million iPads being sold in the quarter. Notably, iPhone sales will be down 17 percent to 18 percent, though that is largely anticipated with the devices product cycle.

Probably the most amazing stat will be iPhone growth, as expected. Current consensus views will be 55 percent better than the 18.65 million iPhones sold in the same period last year...which was 113 percent growth over the previous year.

IPod sales will be down 29 percent from 9.02 million units in Q311.

Consensus gross margins are at 43.3 percent, up 190 basis points from last year, though down from 47.4 percent last quarter.

Data from Streetinsider's Earnings Insider shows that Apple stock typically makes a 3.4 percent move higher in the week following earnings.

Analyst Views
According to data complied at Streetinsider's Ratings Insider, 49 analysts have a Buy rating on Apple, five are Neutral, and none maintains a Sell-equivalent call on the stock.

The analyst price target average is $725, ranging from $450 up to $1,111. Over the last 52-week time frame, Apple has traded within a range of $353.02 to $644.

Analyst Comments
Of note, Apple guided for EPS of $8.68 on revs of $34 billion in last quarter's release.
  • Goldman Sachs sees EPS of $9.98 and sales of $35.54 billion. Goldman was conservative on iPhone shipments, seeing a limited window for bears ahead of iPhone 5 shipments later in 2012.

    The firm is looking for 28 million iPhone shipments, 15.84 million iPads, 4.23 million Macs, and 6.24 million iPods. Goldman cites a strong product halo effect in estimates for Macs and Mac Air sales.

  • Sterne Agee sees revs of $36.1 billion and EPS of $10.45. In terms of unit sales: 27 million iPhones, 15 million iPads, and 4.3 million Macs.

    Commenting, Sterne said, "Talking to investors, there appears to be understanding that the next two quarters will be "choppy" ahead of the 6th gen. iPhone, the big picture being that this will likely be the most powerful mobile phone upgrade cycle ever."

    Sterne also sees typically conservative guidance heading into the fourth quarter.

  • Wedbush is modeling revs of $36.3 billion and EPS of $9.60. The firm sees shipments of 29.8 million iPhones, 12.68 million iPads, 6.33 million iPods, and 4.63 million Macs. Again, Wedbush sees some weakness into the tape, with potential downside risk to its unit estimate.

    Looking ahead, Wedbush is bullish on iOS 6, which it believes will be included in the iPhone 5, along with a slimmer profile and 4G LTE capability.

  • BMO Capital sees EPS of $10.51 and revs of $37.04 billion. BMO is modeling the following shipments: iPhone of 28.5 million units, iPads of 14.8 million units, and Macs of 4.2 million units. The firm likes channel expansion of the iPad (launched in China on July 20th). Over the next six quarters, BMO raised its total sales estimates by 3.8 million units. An iPad mini would be an incremental positive to BMOs outlook.

    BMO also sees ASPs for the next iPhone higher than before, anticipating ASP of $645 per unit in December 2012 quarter, from $600 per unit last year.

  • Needham & Company is looking for EPS of $10.38 and revs of $38.25 billion. Shipments: 28 million iPhones, 4.55 million Macs, 20 million Macs, and 6.525 million iPods.

    Notably, the firm sees iPad sales outpacing iPhone sales fairly soon, with rapid adoption into the enterprise market. Needham recently raised iPad shipment guidance from 13.5 million units prior, to better reflect the pace at which sales continue to grow.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Apple's past performance at Streetinsider's Apple's Income Statement.

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Analyst Comments, Analyst EPS View

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Needham & Company, BMO Capital, Sterne Agee, Earnings


Michael Calaizzo on 2012-07-24 14:03:15
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check the latest revenues

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