Apple’s outlook to take on more weight after quarterly results

To call it a winter of discontent for Apple would be giving too much credit to winter. It has been a year of discontent at the world’s most-prestigious tech company, at least as far as Apple’s investors have been concerned. Since reaching a 52-week-high of $134.54 on April 28, 2015, Apple’s shares have been caught in an avalanche, falling more than 25 percent to $100.31 Monday, the day before the company’s fiscal first-quarter report.

Now, on the bright side, Apple on Tuesday will report the results for what is, historically, its best business period of the year. Analysts surveyed by Thomson Reuters expect Apple to post a quarterly profit of $3.23 a share on $76.7 billion in revenue, up from the $3.06-a-share profit and sales of $74.6 billion that Apple reported a year ago.

As is often the case with Apple’s first-quarter results, iPhones are expected to be a highlight, and why not? The company released the new iPhone 6 Plus and iPhone 6S Plus late last year, and millions of those certainly found their way into million of stockings at Christmas. Many Wall Street analysts think Apple will say it sold more than 76 million iPhones during the quarter, which would be a bit higher than than 74.5 million that Apple sold during the year-ago period.

It’s going to be tricky for Apple. Coming off its end-of-the year report, Chief Executive Tim Cook will rightfully want to brag about the company’s performance. But, it’s what Apple says about its fiscal second quarter that will determine whether Apple is on track to calm its investors’ nerves.

The first three months of the year always show a sequential decline in revenue sales, and iPhone shipments for Apple. But the big thing that will drive much of the Apple sentiment for the next few months will be whether iPhone sales increase over last year’s similar quarter. Analysts such as Gene Munster, of Piper Jaffray, estimate that Apple’s second-quarter iPhone sales could fall by as much as 10 percent from a year ago. During that period, Apple sold 61.1 million iPhones, which accounted for $40.3 billion of the $58 billion Apple reported in the quarter.

It’s no secret that more than any other product it makes, Apple is built on the iPhone. And with the U.S. markets roiling through the first three weeks of the year, reports of slow iPhone growth in China aren’t doing anything to alleviate investors’ concerns about where Apple might be headed in 2016.

 

Photo: Apple CEO Tim Cook introduces the iPhone 6s during a media event in San Francisco on Sept. 9, 2015. (Josh Edelson/AFP/Getty Images)

 

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