Apple Should Report Results Slightly Better Than Guidance

Fortune reporter Philip Elmer-Dewitt compiles Apple forecasts from sell-side and independent analysts. For the June quarter 59 analysts (38 Wall Street professionals and 21 Independents) have a range of $32.8 to $38.1 billion in revenue while the sell-side analysts range from $33.8 to $36.2 billion (average of $35 billion). Apple's revenue guidance is $33.5 to $35.5 billion and I am at $36 billion. Note that my family and I own Apple shares.

My $500 million revenue projection above the high end of guidance is based on stronger iPad shipments vs. the consensus. I am at 20 million vs. the sell-side average of 17.7 million, which is a $1 billion delta. Also Apple has historically beaten its revenue (and other guidance) with last quarters $43.6 billion in revenue coming in $600 million above guidance.

Source: Fortune magazine Philip Elmer-Dewitt

Apple is going to have lower EPS year over year since last years gross margin of 42.8% was the third highest in company history and with higher bill of materials in the current product line-up the sell-side analysts average estimate is 36.6%. I am projecting 36.4% and the company's guidance is a range of 36% to 37%. One of the headwinds to higher gross margin will be stronger memory pricing as seen in SanDisk 's results.

Apple reported EPS last June of $9.32 and my EPS estimate is $7.47 vs. the range for all but two of the sell-side analysts of $6.64 to $7.61 (average of $7.29). When you use Apple's revenue, gross margin, operating expense, other income and tax guidance the EPS guidance range is:

Low $6.65

Middle $7.05

High $7.45

As usual the biggest swing factor for revenue and earnings will be how many iPhones Apple sold. Most of the sell-side analysts are between 25 and 29 million with an average of 26.6 million (I am estimating 26.4 million). While Verizon reported stronger than expected iPhone activations for its June quarter this result could have been significantly helped by the two year upgrade cycle since Verizon launched its first iPhone on February 10, 2011.

The company will webcast its earnings conference call on Tuesday, July 23, at 2:00 pm PT and you can listen to it using this link.

Source: Fortune magazine Philip Elmer-Dewitt

Follow me on Twitter @sandhillinsight or on Forbes.com