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Apple: The Biggest Earnings Report In The World

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Apple (AAPL) reports its June-quarter earnings today.

And given the fragile state of the overall market, Apple's earnings and outlook are likely to be important for far more than just Apple and tech sector.

As with of Apple's quarterly results, there is likely a big difference between the formal "guidance" Apple issued three months ago and the market's actual expectations for the quarter — the market expects $10.36 earnings per share on $37.2 million in revenue, according to analysts polled by Thomson Reuters.

Apple has a longstanding practice of issuing absurdly conservative guidance and then blowing these numbers away. Apple has done this so consistently for so long, however, that the market has long since come to expect it.

So don't be surprised if Apple reports what looks to be an "upside surprise"--only to have the stock fall as some investors see the results as disappointing.

Analyst Jay Yarow at Business Insider has published a chart showing the difference between Apple's revenue and earnings guidance and its actual results for the past several quarters. As you can see, Apple tends to beat its guidance by a relatively consistent margin each quarter. By projecting this standard difference onto this quarter's guidance, Yarow has concluded that Apple's "real" earnings expectations are likely about $12 in EPS and $40 billion of revenue.

Yarow has also published a detailed preview of Apple's quarter. Here's what he says analysts are looking for:

  • Revenue: Street consensus: $37.1 billion
  • EPS: Street consensus: $10.36
  • iPhone sales: 29 million
  • iPad sales: 16 million
  • Mac sales: Street consensus: 4.1 million
  • September quarter revenue: Street consensus: $38 billion
  • September EPS: Street consensus: $10.22

Apple shareholder Jeff Macke and I discuss the results in the accompanying video. You can also read a detailed preview of Apple's quarter here.