Apple reports fiscal 4Q tommorow

 

SAN FRANCISCO ----  Wall Street is not expecting much when Apple reports its fiscal fourth-quarter results tommorrow. 

The 47 stock analysts who publish research on Apple see the company's quarterly profit falling slightly from a year earlier, based on their average earnings estimate of $7.92 a share.
Sales are seen nudging about 2% higher, to $36.8 billion.

Of more concern to investors than the September quarterly numbers will be what Apple has to say about demand trajectory for its two newest smartphones, iPhone 5c and 5s.
Last month, Apple said it sold more than 9 million iPhones in the first weekend the new devices were available, a record.

Yet Monday's earnings report will provide little more than a preview of demand for Apple's latest smartphone models, which were available only for the last two weeks of the quarter.
And consumer demand for the latest iPads — which became available just last week — won't be known until January, when Apple reports results for the current quarter ending in December.

That report will show how many consumer-electronics fans chose Apple smartphones and tablets over rival devices during the crucial holiday shopping season. As the market for mobile devices has matured, rivals including Samsung and others have offered less-expensive competing products, which triggered Apple's profit decline this fiscal year.
For the quarter ended in June, for example, iPad revenue fell 27% from a year earlier, while unit sales fell 14% – the first year-over-year sales drop since the device was introduced three years ago.

More troubling was that iPad revenue during the period fell almost twice as fast as unit sales, suggesting significant downward pressure on average prices for Apple tablets.
For the nine months ended in June, for example, iPhone unit sales rose 19% while iPhone revenue climbed 16%.

Apple gets just over half its revenue from smartphone sales, and some on Wall Street are wondering whether it can continue to find enough buyers to sustain growth, especially because its latest models are priced higher than rival devices.

Many analysts were disappointed last month when Apple priced its iPhone 5C starting at $549 (excluding any wireless carrier subsidies), a level beyond the reach of most smartphone buyers in developing economies.

Investors who have bought the stock during the last month are betting that the two new models — plus the new iPad Air and iPad Mini tablets — will be enough to start again Apple's growth.

Yet apart from any specific product forecasts from the company Monday, they won't know until January whether higher sales of the new products will be enough to boost Apple's bottom line.