Apple Expected to Report Record June Quarter iPhone Sales
Ahead of Apple’s (NASDAQ:AAPL) third-quarter earnings release on July 22, Wells Fargo (NYSE:WFC) Securities released a report detailing its expectations for the company’s earnings, projecting gross margin strength and another record June quarter.
Wells Fargo Securities analyst Maynard Um estimates that Apple will report $38.2 billion in revenue for the quarter ending in June versus the $35.3 billion that Apple reported last year. He also expects Apple to break its record for June quarter iPhone sales, and projects that the company will report shipments of 36.5 million iPhones, significantly higher than the 31 million shipped in the same quarter last year.
Um notes that iPhone sales in the June quarter were driven by promotions, and by the addition of 14 new carriers. He says that promotions offset gross margin, which “could be better,” but his projections place Apple’s gross margin at 38.3 percent, slightly higher than the company’s guidance of 37 to 38 percent. Um places shipments of iPads at 12 million, Macs at 3.9 million, and iPods at 1.9 million, versus 14.6 million, 3.8 million, and 4.6 million respectively last year.
Sixteen new carriers were added since the end of April, adding four new countries and bringing the total of Apple’s carriers to 332. However, Um points out that most of the countries added were either ones where Apple already had an existing presence, or were small countries, referring to Brunei, Kosovo, Kazakhstan, and Lebanon. Um believes that Apple may need to choose between better growth and higher margins:
“We believe the remaining channel opportunity is smaller in size and more suited to low-end products, which may ultimately result in Apple having to choose between unit growth and ASP/margin.”