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Apple is known for dramatically lowballing its profit guidance, and then miraculously blowing out “expectations.”
Since Sept. 2006, Apple has topped its quarterly EPS guidance by an average 41%, and its revenue guidance by an average 9%.
So what does that mean for this quarter, which will be Tuesday afternoon? (Join us for LIVE coverage.)
It’s a little tricky, because Apple significantly changed its accounting practices a few quarters ago. It now recognises iPhone revenue almost all at once, instead of spreading it over 24 months. So we won’t know reliably for a few more quarters just how much Apple is lowballing its guidance using the new numbers. (Though the last few quarters, Apple blew out its sales numbers even more than it usually does.)
But running the old formula, based on Apple’s December quarter guidance of $4.80 EPS and $23 billion in sales, history suggests Apple should report EPS of about $6.77 on $25 billion of revenue. (Given that much of the growth is coming from the lower-margin iPad, that earnings number could be particularly hard to reach.)
Wall Street expects lower earnings and revenue: Consensus stands at $5.38 of EPS on $24.4 billion of sales. So Apple is set up to once again “surprise.”
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