Apple earnings preview: SEC inquiry, Jobs' health, iPhone vs. iPod Touch

Wall Street analysts likely will have plenty of questions when Apple executives host a conference call to report first quarter earnings later today.Have the company been contacted by the Securities and Exchange Commission about its disclosures related to Steve Jobs' health?

Wall Street analysts likely will have plenty of questions when Apple executives host a conference call to report first quarter earnings later today.

  • Have the company been contacted by the Securities and Exchange Commission about its disclosures related to Steve Jobs' health?
  • Speaking of Steve Jobs and his health, is there an update? Is Jobs still expecting to return at the end of June?
  • Has the company come up with a succession plan in the event Jobs doesn't return to work?

I'm not expecting that anyone on that call will actually answer any of those questions. The company declined to comment on a Bloomberg report that the SEC is looking into the disclosures. The company has maintained a position that Jobs' health is a private matter. And I doubt that anyone will want to talk succession, seeing how the official word from Cupertino is that Jobs will return at the end of June.

Also see: Jobs to take medical leave; Cook in charge; Will Jobs appear at WWDC?; Jobs’ medical leave: right to privacy vs right to know

What we will hear about is how more than a half-million iPhone (and iPod Touch) applications have been downloaded from the iTunes store. Repeatedly, that has become the bright spot of news everytime Apple talks publicly. We'll likely also hear about international sales of iPhones, which could be the wild card that comes into play to offset the sluggish holiday season in the U.S.

Morgan Stanley said in a report that Apple's iPhone sales in the U.S. are expected to be down 24 percent for the quarter, compared to the earlier quarter when the 3G device was released.

What I'd like to know - but don't expect to get - is how iPod sales breakdown. Specifically, did the iPod Touch - basically, an iPhone without the phone and a handful of other features - cannibalize sales of the iPhone during the quarter. After all, sales of the iPod Touch probably boosted the momentum that we've been seeing in app downloads. Piper Jaffray said in a report that it also expects in-line results on iPods and could get "a positive surprise" on Mac sales.

Also see: Apple’s future: It’s in the Touch

Apple, which consistently offers conservative guidance, said in October that it expects to earn $1.06 to $1.35 per share on sales from $9 billion to $10 billion for the December quarter. Analysts are expecting income of $1.39 per share on sales of $9.74 billion, according to a survey by Thomson Reuters. Piper Jaffray said in its report that it expects to see guidance that's even more conservative than usual because of the global economic climate.

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