Apple's Q4 preview: About those iPhone 5 sales

Apple's Q4 preview: About those iPhone 5 sales

Summary: Analysts expect a big December quarter due to the iPhone 5 and iPad mini. It's the quarter about to be reported that's a wild card.

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Apple's fourth quarter earnings report will revolve around sales of the iPhone 5 and prospects for its iPad mini.

Analysts have been dissecting earnings reports from AT&T and Verizon. Those two carriers sold about 2 million iPhone 5 devices collectively. Those sales have been extrapolated to global units for analyst guesstimates for the iPhone 5.

The company is expected to report fiscal fourth quarter earnings of $8.74 a share on revenue of $35.8 billion. For fiscal 2012, Apple is expected to report earnings of $44.28 a share on revenue of $156.3 billion.

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Overall, expectations are high for the iPhone 5, but most of the financial impact will be delivered in the fiscal first quarter ending Dec. 31.

Piper Jaffray analyst Gene Munster said in a research note:

The company activated 4.7 million iPhones, which is up 27% q/q. About 1.3 million of those activations appear to be iPhone 5's, suggesting that the US received close to half of the initial 5 million allocation of iPhone 5's from Apple. While we remain comfortable with our 25m iPhone estimate, we note that early activation numbers from AT&T and Verizon suggest potentially stronger sales of non-iPhone 5s than we previously expected.

In other words, the iPhone 4 and 4S devices are still selling reasonably well. It's unclear what that actually means for the iPhone 5 over the long run. Analysts indicate that iPhone 5 sales may have been hampered by supply issues. Apple usually takes a quarter to fill its inventory levels to meet demand.

Jefferies analyst Peter Misek noted that AT&T "received more than its fair share" of iPhone 5 units. AT&T also noted that there was pent-up demand for the iPhone 5. Overall, that reality means that the December quarter will have analysts salivating.

Not all analysts are sold on Apple's fourth quarter results. Wedbush analyst Scott Sutherland noted that Apple could be either in line or miss expectations.

Sutherland said in a research note:

While we have held steady with our estimate of 24.1 million iPhones, including 6 million iPhone 5s, we have seen some Street numbers stretched to very optimistic levels (some >30 million) to only see them reduced. That said, we believe some upside exists to our iPhone estimates. That said, we believe a large part of the issue appears to be supply constraints and not demand for the iPhone 5. Based on iPad shipments as of two weeks ago, we now believe Apple will ship ~15.5 million iPad in FQ4 versus our estimate of 17.5 million. We believe some of the weakness is likely due to the anticipation of the iPad mini and 4th generation iPad.

More:

More analysts seem optimistic for iPad mini, smaller tablet market

Apple's iPad mini pricing: Did it miss the tablet death blow?

Topics: Mobility, Apple, iPhone, Smartphones

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6 comments
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  • Go Apple!

    Make me some more money.
    DontUseMicrosoftAtAll
    • This time Apple's results are going to be flat comparing to previous ...

      quarter.

      iPad and iPhone sales will be lower, Macintosh sales will be higher.
      DDERSSS
      • Wait, what?

        "This time Apple's results are going to be flat comparing to previous quarter." OK, Nostradamus–which result? Revenue? EPS? Net income? And which previous quarter? Calendar or year-over-year?
        matthew_maurice
  • Go Apple!

    Make me some more money.
    DontUseMicrosoftAtAll
  • Go Apple!

    Make me some more money.
    DontUseMicrosoftAtAll
  • IPhone sales

    Unless Apple can fill up the supply line so that anyone who wants an iPhone 5 can BUY one before the end of November, they won't be getting record-breaking sales. I don't plan to buy one until I can walk into a store and walk out with one. If that happens in November, great. I had to wait until December for the 4S to reach the point, so it is no surprise that the iPhone 5 is following the same track. Question is WHY hasn't Apple learned about producing enough devices?
    rphunter42