- Apple (NASDAQ:AAPL) reports Q2 results aftermarket today and all eyes are on the performance of the iPhone after TSMC reported a weaker-than-expected outlook. Other areas to watch include services revenue and a potential record-breaking capital allocation announcement.
- Revenue: Consensus expects revenue of $60.91B (Apple guided $60B to $62B), which would represent a 15% Y/Y growth, and EPS of $2.67 (was: $2.10 last year).
- Gross margins: Apple guided 38% to 38.5% and consensus sits near 38.5%.
- Check iPhones: Apple sold 77.3M iPhones last quarter, which included the holiday season, with an estimated 27M iPhone Xs. Consensus has overall iPhone unit sales of about 52M for Q2 compared to 50.8M units last year. Look at the iPhone average selling price or ASP to know how the newer iPhones performed. Last quarter, the ASP was $796 and a big drop would suggest that the high-priced X hit a sales wall.
- More device sales: Shipments of iPads expected at 8.8M units (10.2M last year) and Macs at 4.1M units (4.2M last year).
- Seasonality: March is a seasonably slow quarter for Apple, made worse by the contraction of the global smartphone market due in part to people waiting longer to upgrade.
- Guidance: Some analysts think the iPhone X sales thud won’t hit until Q3 so if Q2 shows better-than-expected results, check to make sure the guidance doesn’t show that the impact is still coming. Consensus has guidance at revenue of $51.6B and EPS at $2.11.
- Services: The Services segment missed analyst expectations last quarter with $8.6B. Consensus has this quarter at $8.4B.
- Capital allocation: Analysts expect $75B to $150B in shareholder returns in the form of buybacks and dividends this quarter.
- Apple shares are up 1% to $166.92.
- Previously: Apple gains on expectations of record capital allocation program (April 30)
- Previously: Analysts and investors make predictions ahead of Apple earnings (April 30)
- Now read: Apple: Major iPhone Mistake Coming?
Original article