A
new forecast from analysts and a late prediction from investment firm Cowen and Company have combined to move the needle slightly upwards in terms of the optimism of guesses on Apple's earnings for its fiscal Q4 quarter, which will be reported later today (
MacNN will, of course, have
live coverage). Compared to a
recent polling of analysts by
Fortune magazine, the new consensus rises just over the top of Apple's guidance, now at $51 billion in revenue.
While some AAPL veterans say the uptick is intended to set the stock up for failure regardless of the reported numbers by moving the goalposts to make it difficult for Apple to
beat expectations, the revised consensus also reflects increased optimism in Apple's ability to sell iPhones in China, which was recently bolstered by a report that had the Cupertino company had sold the most smartphones of any vendor in China -- including two home-grown makers, Huawei and Xiaomi -- to take
the lead in marketshare in September.
The Thomson Reuters poll now expects earnings of $51.11 billion, which would represent a 21.3 percent increase from the year-ago quarter. Estimates for the unadjusted net profit would thus be about $10.72 billion. In the current environment, it is unclear what effect Apple's actual numbers will have on the stock, which has been declining recently for no clear reason. It is still, however, up $8 from its price this time last year, though well off it's 52-week high of $134 per share.
Wildcards in the revenue picture include the new models of iPad introduced near the end of the quarter, which aren't expected to have a significant impact but could indicate some growth as iPad 2 owners begin finally upgrading, and as Apple's partnership with IBM continues to bear fruit. Mac sales my also add to Apple's bottom line, as the company has recently seen strong interest in its notebook and iMac lines, though some analysts are expecting Mac sales to drop from the year-ago quarter.
There is also the Apple Watch. While Apple is not expected to reveal specific numbers, estimates of the product's impact on revenue are all over the map, and thus it could contribute to overall earnings even if actual sales are lower than the top end of estimates, which range between four million and 10 million units sold thus far. The Apple Watch, along with the iPad and iPhone, is likely to play a bigger role in the company's fiscal Q1 2016 revenues, which covers the holiday buying season.
Cowen and Company have produced an even rosier estimate of fiscal Q4 sales, believing Apple has sold 50 million iPhone (higher than the consensus, which is just under 49 million) but only 9.5 million iPads (a 30 percent drop year-over-year), and beating the Reuters consensus with an expectation of $51.5 billion in revenue. Analyst Tim Arcuri believes increasing sales from China will help drive the company to record revenues for Q4 and the December quarter. For the Christmas season, Arcuri believes Apple will ship between 78 million and 80 million iPhones and set yet another holiday season sales record.
Arcuri also believes the company is continuing to work on a sort of successor to the iPhone 5s that would continue the tradition of the four-inch screen, catering to those customers who prefer the smaller screen size but still want some of the advantages and new features that have come with the iPhone 6 and 6s models. Cowen yesterday increased its AAPL price target to $135 per share, which would be a record price, but have maintained a rating of only "market perform." Arcuri explained this by saying the stock has "broadly entered a holding pattern, albeit with an upward bias."
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