Here are the two things to watch from Apple's earnings report

Apple reports earnings on Tuesday, July 21 after the market closes for its fiscal Q2, or the period covering April, May, and June.

The June quarter, as its called, is normally pretty boring.

But this time there are two exciting things to keep an eye on.

The first is the iPhone. Duh.

The iPhone has been on an unbelievable run since Apple released the iPhone 6 and the iPhone 6 Plus. It’s been smashing expectations, delivering record breaking sales and profits.

Apple is expected to sell 49.4 million iPhones, according to Fortune’s roundup of analyst estimates.

If Apple hits that number will be 40% growth for the iPhone, which is flat out astounding. The iPhone is a $US154 billion business that is still able to grow at 40% annually on a quarterly basis. There’s nothing else in the world like this.

The other thing to watch will be the Apple Watch, which went on sale at the end of April. Those sales will be included in Apple’s earnings for the first time ever.

Apple said it doesn’t plan to report watch sales. The watch will be lumped in with “other products” which did $US1.7 billion in revenue last quarter. Analysts will have to “back out” a watch number from the “other” results.

Analysts are all over the place on the watch, so we don’t have a solid unit number to use. Also, we don’t have a solid average price for the watch, so it’s hard to figure a consensus revenue estimate for the watch. The analysts at Stifel estimates Apple sold 3.3 million watches. If we use a $US500 average selling price, then that would be an extra $US1.7 billion in revenue for the “other” category.

Basically, just look at what Apple reports in “other”. If it’s mind meltingly higher than last quarter, then the watch is a smash hit. If it’s not much higher, then the watch is in trouble. If it’s just good or great, then expect continued confusion. Analysts will ask questions on the call, and we expect Apple will deflect.

We’ll be covering the report and the call live on Tuesday. Until then, here are the big numbers people care about:

  • Revenue: $US49.22 billion, via Yahoo Finance (would be growth of 31.5%
  • EPS: $US1.80, via Yahoo Finance (would be growth of 41%)
  • iPhone units: 49.4 million, via Fortune (would be growth of 40%)
  • Gross Margin: 39.5%, via Gene Munster of Piper Jaffray
  • Revenue guidance: $US50 billion, via Gene Munster of Piper Jaffray

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