The market’s response to Apple’s (AAPL) earnings report tomorrow will be mostly, if not entirely, to its December quarter sales and gross margin projections. But investors will also be paying attention to how Apple’s Mac business — its main growth driver for the last year — has weathered the crappy economy.
Incremental good news: An analysis of September quarter retail sales data by Piper Jaffray analyst Gene Munster suggests Mac unit sales of 2.7 million to 2.8 million, which would beat the Street’s consensus of 2.7 million Macs. (Though that would come in below some analysts’ projections of 2.9-3.0 million Macs.) Munster also says the retail data from NPD Group suggests Apple sold 11 million iPods last quarter, slightly ahead of the Street’s 10.8 million consensus.
So, how about that guidance? Apple has a reliable habit of lowballing its forecasts, and this quarter should be no different. Munster calculates that over the last two years, Apple guides EPS 9% below Street consensus, on average, and guides revenue 4% below expectations, on average. Yet the company’s actual results have beaten the Street’s EPS estimates by an average 27%, and revenue estimates by an average 4%.
So how about now, with the market in the toilet and the risk that consumers won’t buy nearly as many Macs, iPods, and iPhones this Christmas as they normally might? Munster thinks Apple will guide even more conservatively: EPS 5% below consensus to about $1.41 and revenue 15% below consensus to $10.1 billion. RBC’s Mike Abramsky, meanwhile, expects Apple to guide to $10.6-10.7 billion in sales and $1.55-1.65 in EPS.
What we’ll be waiting for: Whether investors will finally take Apple’s conservatism in stride, or if they will send shares down sharply in after-hours trading as they did in July.