Apple’s June-ending quarter results, to be announced Tuesday, won’t be nearly as interesting and relevant as the forecasts that come with them. All eyes are on the next two quarters, within which Apple will release new iPhones.
Apple won’t report history-making financial results when it reports earnings Tuesday, but nobody’s expecting it, and investors aren’t likely to run for the exits even if the numbers are worse than they project.
The June-ending quarter is always a seasonally slow period for iPhone sales, which represent roughly 60% of Apple’s revenues. That’s because many iPhone owners (and first-time buyers) have already begun to look forward to the new iPhones coming up, which Apple tends to announce and launch in September. People sensibly hold off on upgrading.
This year the slump may be even worse because Apple will likely announce a mold-breaking new iPhone (aka iPhone 8, aka iPhone Pro, aka iPhone X) in September that packs a bunch of new features and a strikingly new design. The potential appeal of that device might cause even more upgrade delays than usual.
When Apple reported that iPhone sales for the March-ending quarter were down from the year-ago quarter, Tim Cook blamed the shortfall on persistent reports speculating on the features in the upcoming phone. We might hear similar explanations during the quarterly call with analysts on Tuesday.
Analysts surveyed by Factset expect Apple to sell 40.7 million iPhones during the June quarter, driving overall revenues of $44.9 billion. This would mark an increase of about 6% over last year’s June-ending quarter.
A Question of Timing?
Adding to the fun is the distinct possibility that the iPhone 8 might arrive late by the standards of previous iPhones. Media and analyst reports have also suggested that due to the complexity of the new iPhone 8, it might not start selling in September alongside the other two new phones–the successors to the iPhone 7 and 7 Plus (likely called the iPhone 7s and 7s Plus). Apple’s forecast for the September-ending quarter might reflect that.
If the iPhone 8 does indeed ship later than its more straightforward siblings, the September-ending quarter will reflect no sales of that device, which many believe will sell for well over $1,000. It could point the way, however, to a huge holiday quarter–assuming the phone is out for that full quarter.
We’ll be reporting Apple’s results Tuesday and offering commentary about any gems that come out of the call with analysts.
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