This One Piece of Data Will Make or Break Apple Earnings
All facets of Apple’s (NASDAQ:AAPL) earnings report later on Tuesday will be analyzed minutely. However, one of the first figures that most analysts and investors will be on the lookout for is iPhone sales. After all, that is the point on which BTIG analyst Walter Piecyk had first cut his ratings for Apple stock last month, raising much noise. And new data from wireless carriers has not done much to ease worries. Here’s What to Expect From Apple Earnings>>
This morning, AT&T (NYSE:T) delivered some bad news, announcing it activated just 4.3 million iPhones in the first quarter, down from 7.6 million in the fourth quarter when the new iPhone 4S was released. That translated to a 43 percent sequential decline.
Last week, Verizon Wireless (NYSE:VZ) said it sold only 3.2 million iPhone devices in the last quarter, a 24 percent decline in activations quarter-over-quarter. Together, the two largest wireless operators in country have now reported a 37 percent drop in iPhone activations on a sequential basis.
While the drop in AT&T and Verizon phone sales was possibly effected by the fact that comparisons were being made with the heavy volume holiday quarter, Apple’s own performance will be closely watched, too. Piper Jaffray analyst Gene Munster has said that insider, or buy-side, expectations are that Apple will report iPhone sales between 31 million and 32 million units. If the mark is missed on Tuesday afternoon, the company’s stock, which has been unexpectedly unstable over the last few days, is likely to drop again.
Apple should be able to beat any domestic shortfalls with international sales, including those in China. One piece of good news for Apple from the two wireless companies’ reports was that iPhones made up 78 percent of AT&T’s 5.5 million smartphones sales and more than half of all Verizon phone sales.
Apple is also expected to report 12 to 13 million units of iPads sales and about 4 million units of Mac computer sales. We’ll see how the actual numbers line up when Apple reports earnings today after closing bell.