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Apple’s earnings call will be the calm before iPhone X superstorm

Posted November 1, 2017 | App Store | Apple Music | iMac | iMac Pro | iPad | iPhone | iPhone 8 | iPhone X | iTunes | Luca Maestri | Mac | MacBook | News | Services | Tim Cook


Apple is set to give investors their first glimpse of how well iPhone 8 sales are doing right on the eve of the iPhone X launch.

The final Apple earnings call of 2017 is set to take place on Thursday November 2 at 2PM PT. Apple’s fourth fiscal quarter ended right after the iPhone 8 started shipping. The results aren’t expected to be record-breaking, but it will give us a better idea of how monstrous Apple’s holiday season could be.

This is what to watch for:

Revenue

Usually, Apple gets a big boost this quarter from new iPhone sales. This year, however, the iPhone 8 went on sale a bit later and demand wasn’t as great because of the iPhone X.

Apple is still expecting to see an increase in revenues though and estimates it will bring in between $49 billion to $52 billion. Most analysts on Wall Street predict revenues will meet estimates, but few think Apple will knock it out of the park. Last year Apple brought in $46.85 billion in revenue, so anything above that will be a good sign. On average, analysts expect Apple to bring in about $9.7 billion worth of profit.

iPhone 8 sales

Tim Cook said he couldn’t be happier with iPhone 8 sales on launch day, but other analysts aren’t as positive. Some reports have indicated the iPhone 7 might have outsold the iPhone 8 a few days after launch. Other more reliable experts claim those reports are overblown though and the iPhone 8 is fairing better than expected.

Experts predict Apple will have sold 61 million iPhones during the quarter, but we might not know what percentage of that was the iPhone 7. Hopefully, we get some actual iPhone 8 sales numbers during the call to see how well it’s doing.

Q1 2018 Estimates

The biggest piece of info investors will be eager to get are the estimates of how much revenue Apple thinks it will make next quarter. Q1 is always Apple’s biggest quarter thanks to new iPhones and the holiday shopping season. This year’s Q1 could be a record-breaker thanks to the iPhone X, HomePod and iMac Pro.

Analysts expect Apple to project Q1 revenues around $85 billion. That would be a small jump from the $78.4 billion it brought in during Q1 2017, but it would also signify that Apple is confident it can make enough iPhone X supply to keep units shipping out quickly into customers’ hands.

China

Growth in China has been sluggish for Apple recently until the company’s last earnings report where it returned to growth. High demand for the iPhone 8 could give revenues a boost in mainland China. Some investors are worried though that many customers are waiting for the iPhone X and growth won’t be as strong as hoped for.

Services

Money generated from the App Store, iTunes, Apple Music, iCloud and other services have become an important part of Apple’s business over the last few quarters. The company expects services to be the size of a Fortune 100 company by 2020 but it’s going to need more users to get there. Analysts expect Apple will have no problem making more revenue from services this quarter, the only question is how much will it grow?

Other devices

iPad sales were surprisingly strong last quarter thanks to lower prices on the cheapest model while Mac sales continued to perform well relative to the rest of the PC industry. Most analysts think iPad sales should continue to perform well throughout the rest of 2017 which should line up Q1 2018 to be Apple’s biggest quarter ever.



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