Analysts Set High Expectations for Apple Ahead of Earnings Report

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Source: Thinkstock

Source: Thinkstock

Apple (NASDAQ:AAPL) will announce its fiscal third-quarter results on Tuesday, July 22 after the markets close. Apple’s fiscal third-quarters have historically recorded slow sales since many consumers are holding off on purchasing another iPhone until the new models are launched in September, during the fiscal fourth-quarter. However, based on the surprising strength of Apple’s iPhone sales during the March quarter and the continuing impact of the company’s distribution deal with carrier partner China Mobile (NYSE:CHL), analysts’ expectations are especially high for this year’s June quarter results. According to analyst estimate data compiled by Yahoo Finance, the average revenue estimate for Apple’s fiscal third-quarter is $37.93 billion, while the average estimate for EPS is $1.23.

This revenue consensus estimate falls at the high end of Apple’s fiscal third-quarter guidance for revenue between $36 billion and $38 billion. Apple also said it expected gross margin between 37 percent and 38 percent, operating expenses between $4.4 billion and $4.5 billion, other income of $200 million, and a tax rate of 26.1 percent. It should be noted that Apple no longer provides EPS guidance.

Meanwhile, other analysts are expecting Apple to beat its earnings guidance. In a note issued to investors on Monday morning, Cantor Fitzgerald analyst Brian White raised his revenue estimate to $38.2 billion from $37.8 billion and adjusted his EPS projection to $1.25 from $1.19. Like many analysts, White believes this growth will be driven by Apple’s iPhone sales. White raised his iPhone estimate to 36.7 million units from 33.7 million based on “a disappointing Galaxy S5 launch by Samsung (SSNLF.PK) and challenges at other competitors.”

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