Apple reports September quarter earnings after the bell. Join us here for LIVE analysis and coverage beginning at 4 p.m. ET, and live coverage of the earnings call at 5 p.m. ET.
Preview: Apple should have no trouble beating September quarter expectations, led by strong iPhone and Mac sales.
But as always, Apple investors will pay more attention to Apple’s guidance than its results — that’s what sends shares up or down after hours.
This time, there’s two sets of guidance numbers investors will need to look out for, which will be drastically different based on what accounting technique Apple plans to use for the December quarter.
Why? The U.S. Financial Accounting Standards Board approved a rule change last month that would allow Apple to report revenue and profit for its iPhone and Apple TV devices in the quarter they’re sold — and continue to supply free software updates — rather than spreading them over a 24-month “subscription” period.
That means Apple’s GAAP results and guidance — which publications and analysts traditionally cite — would get much bigger immediately, because they’re based on totally different maths. EPS could be as much as 50% higher.
For example, RBC analyst Mike Abramsky predicts Apple’s December quarter guidance under the new accounting method will be $12.4-12.7 billion of sales and $2.44-2.60 EPS. Under the old accounting method, he expects guidance to look more like $10.8-11.0 billion of sales and $1.64-1.75 EPS. The Street consensus is $11.45 billion of sales and $1.91 of EPS, assuming the old accounting method.
Note that this is only a change on paper — Apple’s actual business remains the same. And we expect Apple to continue to offer “comically” conservative guidance — see our feature on Apple’s earnings game here and a video explanation here. But either way, switching to the new technique for next quarter — during what will likely be Apple’s biggest quarter ever — could offer a bit of artificial optimism, which could send shares higher.
- Sept. quarter revenue: $9.20 billion consensus, $9.4 billion “real” expectations
- Sept. quarter EPS: $1.42 consensus, $1.65 “real” expectations
- Sept. quarter iPhones: 7.5 million consensus
- Sept. quarter Macs: 2.75 million consensus, 2.9 million (RBC)
- Sept. quarter iPods: 10.5 million consensus, many expect below 10 million
- Dec. quarter guidance: (OLD ACCOUNTING METHOD) $10.8-11 billion sales, $1.65-1.70 EPS.
- Dec. quarter guidance: (NEW ACCOUNTING METHOD) $12.4-12.7 billion of sales and $2.44-2.60 EPS (RBC estimate)
- Dec. quarter consensus: (OLD ACCOUNTING METHOD) $11.45 billion sales, $1.91 EPS