Apple Expected To Report Record Profits

Analysts are looking at Apple for big results when it reports its quarterly earnings Thursday after the market closes — with predictions for net income coming in around $19 billion at the low end.

The most recent quarterly results will represent the first where sales from the iPhone X will be taken into account — and the December-ending quarter tends to be Apple's strongest performer of the year. Apple's previous quarterly revenue record was $18 billion.

As of November, Apple execs were touting the “biggest quarter ever” and a return to double-digit revenue growth during the holiday season for the first time in years.

Apple shares were up to $179 in January — a new record that brought the firm's market cap to a little over $900 billion. That valuation, however, has rolled back some as share price has settled back down to a more modest $171.

According to marketplace analysis in lieu of hard numbers from Apple, Canalys estimates Apple shipped 29m iPhone Xs in the quarter, making it the top-selling smartphone in the run-up to Christmas.

All in all, analysts are looking for Apple to have shipped 81 million phones worldwide this holiday season and total revenues to increase by 11 percent to $86 billion. iPhone sales are expected to cary 2/3 of results.

Neil Cybart, analyst at Above Avalon, a daily Apple newsletter, believes the average selling price of an iPhone could jump by more than $100 to a new record, well above $800.

“Apple saw stellar iPhone X sales” in the quarter, Cybart said.

Cybart also noted that Apple seems to have overcome production difficulties that were forecast early in the season.

“Apple’s supply chain was able to ramp iPhone X production much faster than anyone expected,” he said.

But analysts will be looking for more than iPhone performance, as China is also expected to heavily factor into how Apple's latest results are considered. Morgan Stanley predicts a “strong” double-digit percentage increase in iPhone unit sales in the world’s largest mobile market for the December quarter.

But the new data also indicates China's mobile market is slowing and possibly contracting some.

“The market has slowed faster than expected,” said Canalys analyst Mo Jia.

Apple has also said it expects to pay a record tax bill of $38 billion on its more than $250 billion of overseas profits.



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