Apple's Q3 earnings: The numbers to know

Availability in China is expected to bolster Apple's iPhone shipments in its fiscal third quarter as new product cycles are eyed.
Written by Larry Dignan, Contributor

Apple reports its fiscal third quarter results on Tuesday and the company is expected to be carried by iPhone demand---this time in China.


Of course, iPhone shipments are just one metric to watch. Analysts---and a bevy of onlookers---will be hoping to hear some nugget about future product direction. It's also highly unlikely that Apple CEO Tim Cook will spill anything about a rumored 7-inch iPad or a television set.

In the meantime, here are the numbers to know from Apple's fiscal third quarter.

  • Revenue: Apple is expected to deliver third quarter sales of $37.23 billion, down from $39.18 billion in the second quarter. Keep in mind that Apple historically lowballs its outlook. Wall Street currently expects Apple to have fourth quarter revenue of $38.04 billion.
  • Earnings: The company is expected to deliver third quarter earnings of $10.35 a share.
  • Gross margins: Apple's fiscal third quarter gross margins are expected to be 43.54 percent, down from 47.37 percent in the second quarter.
  • iPhone shipments: Piper Jaffray analyst Gene Munster said in a research note that he's more confident that Apple can ship 28 million to 29 million iPhone units in the quarter. Verizon's earnings highlighted that 2.7 million iPhones were sold. Toss in demand in China via Apple partners China Telecom and China Unicom and Apple should have a whopper of a Asia-Pacific performance.
  • China sales: Munster expects Apple sales in Asia-Pacific to be up 43 percent sequentially. Third quarter iPhone units are estimated to be 10 million, according to Munster.
  • Q4 iPhone shipments: Most analysts are expecting iPhone sales to slow ahead of the fall rollout of iOS 6 and iPhone 5.
  • iPad sales: Wedbush analyst Scott Sutherland estimates that Apple will ship 12.68 million iPads in the fiscal third quarter. A new iOS will spur iPad units to hit 14.58 million in the September quarter.
  • Mac units: Sutherland has Apple pegged to ship 4.63 million Macs in the third quarter. The average selling price for those Macs will be $1,258.
  • iPhone 5 timing: Will the iPhone 5 launch in September or October? The answer will dramatically impact Wall Street's estimates. Peter Misek, an analyst at Jefferies, explained in a research note:

We believe Apple will be at a 10M-12M units/month build rate for the iPhone 5 by end of Aug. This is likely lower than Apple hoped due to screen yield issues (TSMC 28nm capacity no longer looks to be a bottleneck for Qualcomm). We do not know if Apple will choose to launch in late Sep with limited inventory or in Oct with better supply/demand balance. So we are keeping our September quarter 39M iPhone estimate, which assumes a September launch. An October launch would mean 25M shipments in the September and the 14M delta would be added to our prior 50M December quarter estimate.

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