Apple's December quarter: Big earnings an appetizer ahead of tablet

Apple's December quarter: Big earnings an appetizer ahead of tablet

Summary: Apple's upcoming financial report Monday is likely to be stellar, but the focus will shift from what one analyst calls "the year of the Mac" to Wednesday's expected launch of a tablet.

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Apple's upcoming financial report Monday is likely to be stellar, but the focus will shift from what one analyst calls "the year of the Mac" to Wednesday's expected launch of a tablet.

Wall Street analysts expect Apple to report earnings of $2.07 a share on revenue of $12.06 billion in the December quarter. Apple's fiscal first quarter is generally known as the iPod quarter because of the Christmas pop in sales of the music player.

Analysts such as Kevin Dede at Jesup & Lamont expect strong iPod sales, iPhone 3GS adoption and Mac momentum. Dede said in a research note said:

The combination of solid results from Intel in concert with solid results from some high-end retailers leave us comfortable that consumers bought high-end electronics through the quarter despite the nascent economic recovery. Pent-up demand post the downturn could also be a positive sales factor as well, but Apple’s new, large-flat panel screens and increased functionality point to much more computer functionality at lower prices, which we think contributed to solid sales through December.

Indeed, Apple should benefit from a December surge, but any comments from the company are likely to be overshadowed by Wednesday's unveiling of a tablet-like device.

Nevertheless, here's a look at the figures that are expected to propel Apple's results: 3.1 million: The number of Mac units Piper Jaffray analyst Gene Munster expects Apple to sell in the December quarter. Munster wrote in a research note:

Domestic Mac NPD retail data for all 3 months of the Dec. quarter is up 26% year over year vs. Street consensus of up ~19% year over year for the Dec. quarter. The Street is at ~14 year over year growth for CY10; with Mac unit growth tracking up mid-20s year over year we believe Street numbers will come up following the Dec. quarter report. Keep in mind, before the economic slowdown began Mac units were up 30-40% y/y on a quarterly basis. While hype surrounding the expected tablet will be focus of Apple long-term strategy, we believe we will see meaningful near-term upside from the Mac business.

9.3 million: The number of iPhones Apple is expected to sell in the first quarter, according to Munster. The consensus is for 9.1 million iPhones to be sold.

20.45 million: The number of iPod units expected to be sold by Apple in the December quarter based on Macquarie Research estimates. There are some conflicting estimates here. Barclays Capital analyst Ben Reitzes notes that iPod shipments were off 1 percent in December compared to a year ago based on NPD data. Munster projects 20.1 total iPod units, down from 22.7 million units in the December quarter a year ago. The good news: iPod sales will be driven by the iPod touch, a more profitable device.

2 million: The number of tablets Apple will sell in calendar 2010, according to Munster's estimates. Analysts aren't factoring sales of Apple's tablet into their fancy financial models---yet.

Related:

Topics: Apple, Hardware, Operating Systems, Tablets

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7 comments
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  • iPud labour cost is 2%

    ...the chinamen Slaves for your Sweatshop Steve sweat for a sheckel per 14-hour day. But think of all the dividends for shareholders...no...wait...I don't think Apple shares pay dividends....so solly.
    Feldwebel Wolfenstool
    • what is that supposed to mean?

      labor is cheap in china, nothing wrong with that. and while Apple has no need to pay dividends, (hardly any tech companies do)... Apple pays stockholders with huge % increases in value. Apple is up 145%, not bad, just try and find another company that has been that good to shareholders...
      Pederson
    • Racist

      Amazing how you can attempt to criticize Apple not only incorrectly but
      framing it with simply ignorant and troubling racial bigotry. I often
      comment on how far too many commentators here devolve to ad
      hominem commentaries. Your comments warrant an exception. I'm
      hoping the moderator pulls your remarks.
      dheady
    • Am i LYING?

      No.
      Feldwebel Wolfenstool
      • Yes. -nt-

        nt
        Bruizer
  • RE: Apple's December quarter: Big earnings an appetizer ahead of tablet

    I think earnings will be a bit more than expected, Mac sales are extremely strong, while iPod sales will be a fair amount lower than projected.

    The tablet will easily sell 8 million units in 2010, so I think you might have a typo. 2 million? They'll do that within the first few weeks. People have waited for 28 years for an Apple tablet, so the pent up demand is large.
    Pederson
  • Racist? Naw.

    I notice you didn't call me a liar. That's what's important, not your soft, sensitive, culturally relativist liberal skin. Funny with all the Google_PRC hullabaloo lately, the jingo press never mention where Apple is REALLY located. I'd never buy an Apple. How do you know hat they may have put in it?
    Feldwebel Wolfenstool