Will Apple's disappoint Wall Street when it announces its fiscal first quarter financial results on Wednesday 23 January?
When it announced its fourth quarter results back in October, Apple set the bar for its first quarter of 2013, with expectations of $52 billion in revenue. On average, analysts expect Apple to report revenues of $54.5 billion, notes Valuewalk.
By way of comparison, Apple's financial results for its fiscal 2012 first quarter which spanned 14 weeks and ended 31 December, 2011 saw the company post record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion. Apple posted quarterly revenue of $36.0 billion and quarterly net profit of $8.2 billion for the quarter that ended on 30 September.
Despite the first quarter of the financial year traditionally being Apple's most successful - due to Christmas shopping - expectations for the upcoming financial results are perhaps more conservative than usual, with some analysts expecting no profit growth for Apple's Q1 2013 compared to last year's Q1 2012.
There are a number of reasons for this:
- The just finished quarter spanned 13 weeks and this could result in a less favourable comparisons with the 14 week year-ago quarter.
- There are concerns that Apple has reduced orders for iPhone 5 screens due to low demand.
- Apple is thought to have experienced supply shortages for the iPad mini (which is still listed with a one week delivery delay on Apple's site)
However, the Q1 2013 earnings will be the first quarter to include sales of the iPhone 5, fourth-generation iPad, 13-inch Retina MacBook Pro, updated Mac Mini, redesigned iMac, and the iPad Mini. (Some iPhone 5 sales were included in the fourth quarter.)
iPhone sales estimates
Apple is expected to report iPhone shipments of between 43.06 million and 63 million for the quarter, according ot analyst expectations.The highest estimation comes from Traderhood's Nicolae Mihalache and the lowest, surprisingly, from Topeka Capital's Brian White (despite his $1,111 price target on Apple).
By comparison, Apple sold 37.04 million iPhones in the first quarter of 2012, and 26.9 million iPhones in the quarter that ended on 30 September.
However, claims in a Wall Street Journal report that weaker than expected demand for the iPhone 5 have lead Apple to reduce orders with its suppliers, have lead to concerns that Apple may not have sold as many iPhone 5 smartphones as anticipated.
The claims back up similar reports back in December, although further reports at that time suggested that the reduced orders were due to Apple moving its iPhone production to a six-monthly cycle, and the reduction in iPhone 5 part requirements was due to a ramp up in iPhone 6 (or iPhone 5S production).
The WSJ reports that: "Apple’s orders for screens for the January-March quarter, for example, have dropped to roughly half of what it had previously planned to order, two of the people said. The US company has also cut orders for components other than screens, according to one of the people."
The move indicates that sales of the new iPhone haven't been as strong as previously anticipated and demand may be waning, suggests the WSJ.
iPad sales estimates
iPad estimates for the quarter range from 16.8 million to 32 million. That compares to 23.75 millon iPads sold in the December quarter of 2011 and 14 million in the fourth quarter.
Fortune reporter Philip Elmer-Dewitt has gathered 56 analyst projections, ranging from Breaburn Group's Dennis Hilderbrand's 32 million, down to 16.8 million from Argus Research's Jim Kelleher.
Apple sold 15.43 million iPads during the first quarter of 2012, and the last reported quarter saw 14 million iPad sales.
Elmer-Dewitt calculated median estimate among all the analysts polled as 24 million and wrote: That's "55% growth from last year’s results but 67% when you adjust for 2011’s extra week."
There are still a number of factors that could reduce sales expectations, for the quarter:
- The iPad Mini was announced in October and not available until in mid-November.
- The iPad Mini has a one week lead time on Apple’s website which suggests it was supply constrained throughout the December quarter.
- The iPad Mini became available in China in early December.
- The iPad Mini may also have cannibalized some iPad sales.
Mac sales estimates
With regard to Mac sales for the quarter, analyst expectations range from 4.45 million (predicted by Braeburn's Navi Arthanareeswaren) to 6.5 million (predicted by Braeburn's Nick Nansen).
In comparison, Apple sold 5.2 million Macs during the first quarter of 2012, and 4.9 million Macs in the quarter ending 30 September 2012.
Fortune's Phillip Elmer-DeWitt calculates that the median estimate is 5.2 million, but notes that adjusted for that quarter's extra week, it actually represents 8% growth compared to last year.
This is despite a number of factors affecting Mac growth:
- "If the iPad fulfills its promise, Mac sales should go down," writes Fortune's Phillip Elmer-DeWitt.
- It should be noted that Apple appears to be maintaining growth while "Everybody else's PC sales are shrinking".