Apple Earnings Preview: It's All About The iPhone ... - Yahoo! Finance

Provided by Business Insider's Jay Yarow

Apple's (AAPL) earnings are coming today after the market closes.

We will have the results as soon as they hit at this page, so tune in. In the meanwhile, here's what to expect.

After a sustained 30% drop in Apple's stock since September, this earnings report is the most anticipated we can remember. There are a lot of questions surrounding Apple right now. (As The Daily Ticker's Aaron Task and Henry Blodget discuss in the accompanying video)

In particular, investors want to get a true read on the state of the iPhone business. There have been multiple reports that Apple cut iPhone orders for this quarter. The severity of those cuts, and the reasons for them, vary from place to place, but it seems confirmed the cuts happened.

This led analysts to start slashing their March quarter iPhone estimate and their full-year revenue and EPS outlook. As they've cut back their estimates, Apple's stock has crashed.

And yet, despite paring back their March quarter expectations, many analysts have been bumping their iPhone estimates for the December quarter.

Which makes this earnings report, as anticipated as it is, somewhat anticlimactic. Everyone is already focused on the March quarter. And Apple's guidance game makes it very hard to figure out what's really happening this quarter. Multiple analysts have called for Apple to deliver classic low-ball guidance.

Unlike in the past, if Apple delivers super low guidance, the market could react negatively as the low guidance would confirm its fears that the iPhone business is in trouble.

So, if you're an Apple bull, here's what you want tonight: A strong iPhone beat and guidance that isn't ridiculously low. On the earnings call, you're hoping Tim Cook comments on the reports coming from the supply chain and puts the rumors to bed.

If you get just an iPhone beat, or just good guidance, we're not sure you're going to be happy.

Before we wrap this up, there is one thing to note: This quarter is 13 weeks long. Last year's quarter was 14 weeks long. Therefore, year over year comparisons aren't going to be perfect.

Further, last year Apple sold the iPhone 4S only in the holiday quarter. This year, the new iPhone, the iPhone 5 was out for a week before the quarter started. And it was also released in China for part of the quarter. So, comparisons between this quarter and the next are going to be messy.

Here, via Piper Jaffray's Gene Munster, is what the buy-side is expecting from Apple:

• March quarter revenue: $46.9 billion

• March quarter EPS: $12.10

• March quarter gross margin: 41.5%

Again, we'll have the numbers as soon as they hit right here, so tune in.

Source: http://finance.yahoo.com/blogs/daily-ticker/apple-earnings-preview-iphone-guidance-151911442.html

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