Analysts predict record quarter for Apple

With Apple set to reveal its fourth quarter earnings today, analysts are eager to see just how much the company has profited from record-breaking iPhone sales.

In a poll conducted by Fortune, each analyst surveyed predicted that Apple would have a record quarter. The consensus among analysts is that Apple will log $40 billion in revenue and see earnings of $1.32 per share, an increase of 12 percent year over year, according to Fortune.

Analysts’ bullish predictions are based in part on sales of the iPhone 6 and iPhone 6 Plus, which Apple CEO Tim Cook said last week had made for the strongest iPhone debut ever. Though the phones went on sale near the end of the fourth quarter, analysts expect to see a bump.

“Forrester expects that Apple will see the beginnings of its iPhone surge,” analyst J.P. Gownder wrote in a note to investors.

But the earnings may show hints of trouble on the horizon for Apple. The iPad, which Apple updated last week, has seen slumping sales over the past year, and Forrester expects to see “tepid demand” this time around. And analysts’ expectations always set a high bar for Apple to clear.

“Is the company poised to break out to new life time highs, or could shares be negatively impacted by overheated expectations and a slowing market for iPads?” analyst Colin Gillis of BGC Partners asked in a note to investors.

Despite strong demand for the iPhone, analyst Brian White of Cantor Fitzgerald pointed out in a note to investors that sales have been hamstrung by supply constraints and regulatory hurdles in China – the phone went on sale in the country just last week. But analysts expect that those issues will be ironed out by 2015. Analyst Rod Hall of JP Morgan predicted in a note to investors that iPhone shipments will be up 18 percent year-over-year by that quarter.

Gillis is concerned about the iPhone’s market share, which is 11.7 percent worldwide, compared with 84.7 percent for Android, according to tech research firm IDC. But he thinks Apple will get a boost from the wider array of services it is offering. Apple Pay, a mobile payments service that lets users buy items in stores with their phones, debuts today.

“We are positive on the burgeoning service layer that the company is growing,” Gillis wrote.

Apple will announce its earnings for the fourth quarter, which featured an iPhone debut, in a call today (Justin Sullivan/Getty Images). 

 

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