Apple Earnings Preview: The Worst Is Behind Us

Apple (AAPL) reports March quarter earnings today after the bell. Join us for LIVE analysis here beginning at 4 p.m. ET, including live coverage of Apple’s earnings call at 5 p.m.

Investors have low expectations for Apple’s March quarter, with Mac and iPod sales expected flat-to-down year-over-year. But the rest of the year looks good: Apple just released new Macs and iPods, will likely unveil new iPhones in June, and could start selling a tablet/netbook-like device later this year.

So a strong forecast for the June quarter — especially gross margins — could send shares skyward. Likewise, any significant weakness could tank the stock. Apple shares are up 40% this year, while the Nasdaq is up about 5%.

Apple is known for giving conservative guidance, but in January, it guided March quarter guidance above what some investors feared they might, sending shares up 9%.

The company got positive news this morning: AT&T revealed that it had activated 1.6 million iPhones during the March quarter, down only 16% from 1.9 million activations in the Christmas-fuelled December quarter. But that doesn’t necessarily correspond to the iPhone shipments Apple will report this afternoon: Those depend on several additional factors, such as international sales, how many iPhones carriers are keeping in stock, etc.

We’re also interested in what management may say about Steve Jobs — is he still coming back in June? — or the netbook market, a high-growth area in the PC market where Apple isn’t (yet) participating.

Key stats:

  • March qtr. revenue: $7.69 billion consensus (6% y/y growth)
  • March qtr. EPS: $1.09 consensus
  • March qtr. GM: 32.5% guidance, 33.6% RBC estimate
  • March qtr. Mac shipments: 2.1 million consensus
  • March qtr. iPod shipments: 10.0 million consensus
  • March qtr. iPhone shipments: 3.3 million consensus (some analysts at 3.7 million)
  • June qtr. revenue: $8.28 billion consensus (11% y/y growth), guidance could be $7.8-8.1 billion
  • June qtr. EPS: $1.12 consensus, guidance could be $0.92-1.02
  • June qtr. GM: 33% consensus, guidance could be 30.5-31.5%

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