HACKINTOSH.ORG | Macintosh discussion forums

What to Expect From Apple's Third Quarter Earnings Results Today

Apple today will release its fiscal third quarter earnings results (http://www.macrumors.com/2016/06/27/apple-to-announce-q3-2016-earnings-on-july-26/), reflecting a three-month period that ended in late June, and the consensus among analysts is that the company will report a second consecutive decline (http://www.macrumors.com/2016/04/26/apple-forecasts-another-revenue-decline-q3-2016/) in iPhone sales and overall revenue. That same scenario played out last quarter for the first time since 2003 (http://www.macrumors.com/2016/04/26/q2-2016-earnings/).





<img src="(http://cdn.macrumors.com/article-new/2016/04/Apple-down-1.jpg)" alt="Apple-down" width="800" height="238" class="aligncenter size-full wp-image-500237" />


In fact, some analysts have forecasted that iPhone sales may be as low as 38 million to 40 million units, a decline of up to 20 percent compared to the year-ago quarter. If the estimates prove to be accurate, it would mark Apple's worst quarter of iPhone growth ever (https://next.ft.com/content/bf644bd0-52ee-11e6-9664-e0bdc13c3bef) in the smartphone's nine-year history.





Apple itself provided guidance (http://www.macrumors.com/2016/04/26/apple-forecasts-another-revenue-decline-q3-2016/) of between $41 billion and $43 billion in revenue, which would be up to 18 percent lower than the $49.6 billion in revenue it posted in the year-ago quarter. Wall Street expects revenue to be around the $42.1 billion mark (http://www.wsj.com/articles/apple-is-ripe-for-a-rally-1469376231), with earnings of $1.39 a share (http://www.wsj.com/articles/apple-earnings-preview-what-to-watch-1469505741) -- one analyst has EPS as low as $1.35 (http://www.aboveavalon.com/notes/2016/7/25/apple-3q16-earnings-expectation-meters).





<img src="(http://cdn.macrumors.com/article-new/2016/07/Above-Avalon-Q3-2016.jpg)" alt="Above-Avalon-Q3-2016" width="750" height="498" class="aligncenter size-full wp-image-512723" />


iPhone accounts for around two-thirds of Apple's revenue, and an even greater portion of its profits, so the device's recent slide is concerning for investors -- reflected in the price of Apple shares, down around 21 percent from a 52-week high of $123.91. The good news for Apple is that many analysts believe it will "bottom out" in the June quarter (http://www.macrumors.com/2016/06/08/iphone-sales-to-reach-bottom-brian-white/) and return to iPhone and revenue growth by the 2017 fiscal year.





But, until then, the bleeding is expected to continue. iPad sales are forecasted to decline for a tenth consecutive quarter, while market research firm IDC's estimated Apple Watch sales of 1.6 million (http://www.macrumors.com/2016/07/21/apple-watch-vs-samsung-gear-idc-q2-2016/) in the June quarter would be 55 percent lower than the year-ago launch quarter. Mac sales are also projected to decline by up to 10 percent as buyers await a 2016 MacBook Pro (http://www.macrumors.com/roundup/macbook-pro/) and other new models.





As emphasized by Apple CEO Tim Cook (http://www.macrumors.com/roundup/tim-cook/), the recent decline in Apple's hardware sales has been offset by growth in the company's expanding services category, including the likes of Apple Music (http://www.macrumors.com/roundup/apple-music/), Apple Pay (http://www.macrumors.com/roundup/apple-pay/), AppleCare (http://www.macrumors.com/roundup/applecare/), and licensing. That trend looks set to continue, as Above Avalon analyst Neil Cybart forecasts service revenue was $6.1 billion in the June quarter for 20 percent year-over-year growth.





Beyond the third quarter, attention has turned to tempered expectations surrounding the upcoming iPhone 7 (http://www.macrumors.com/roundup/iphone-7/). The consensus among analysts is that a perceived lack of new features coming to the next-generation smartphone could result in a "mega upgrade cycle" for the so-called iPhone 8 (http://www.macrumors.com/roundup/iphone-8/) rumored for 2017. Next year's model is already rumored to feature a new design with an OLED display and glass casing (http://www.macrumors.com/2016/04/17/iphone-glass-casing-amoled-2017/).





Apple will publish its third quarter earnings report at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time), and we will share the results shortly thereafter. MacRumors will then provide live coverage of the ensuing conference call with Cook and Apple CFO Luca Maestri at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).

<div class="linkback">Tags: earnings (http://www.macrumors.com/roundup/earnings/), AAPL (http://www.macrumors.com/roundup/aapl/) </div>
Discuss this article (http://forums.macrumors.com/threads/apple-q3-2016-earnings-what-to-expect.1984610/) in our forums

<div class="feedflare">
<img src="http://feeds.feedburner.com/~ff/MacRumors-Front?d=yIl2AUoC8zA" border="0"></img> (http://feeds.macrumors.com/~ff/MacRumors-Front?a=8UnNXhtxyWQ:l7v34GTFcC8:yIl2AUoC8zA) <img src="http://feeds.feedburner.com/~ff/MacRumors-Front?d=6W8y8wAjSf4" border="0"></img> (http://feeds.macrumors.com/~ff/MacRumors-Front?a=8UnNXhtxyWQ:l7v34GTFcC8:6W8y8wAjSf4) <img src="http://feeds.feedburner.com/~ff/MacRumors-Front?d=qj6IDK7rITs" border="0"></img> (http://feeds.macrumors.com/~ff/MacRumors-Front?a=8UnNXhtxyWQ:l7v34GTFcC8:qj6IDK7rITs)
</div><img src="http://feeds.feedburner.com/~r/MacRumors-Front/~4/8UnNXhtxyWQ" height="1" width="1" alt=""/>

Source: What to Expect From Apple's Third Quarter Earnings Results Today (http://www.macrumors.com/2016/07/26/apple-q3-2016-earnings-what-to-expect/)