Investors are expected to look past Apple's (AAPL) June-quarter earnings report when it comes out after the market close Tuesday, focusing instead on any hints that the iPhone maker gives about the current September quarter and the expected launch of the iPhone 8.
X Analysts will be looking closely at Apple's outlook for clues as to whether the company's 11th-generation smartphone will launch on time late this quarter or be delayed until the December quarter. Some analysts are bracing for Apple to guide Wall Street significantly lower for the current quarter, the company's fiscal fourth quarter, because of a rumored delay in production of the iPhone 8 handset.
Bernstein analyst Toni Sacconaghi cautioned in a note to clients that Apple might deliver a "big guide down" with its June-quarter results.
For Apple's fiscal third quarter, Wall Street expects the company to earn $1.57 a share, up 11% year over year, on sales of $44.89 billion, up 6%.
For the fiscal fourth quarter, analysts are looking for Apple to earn $1.81 a share, up 8%, on sales of $49.21 billion, up 5%.
"We believe investors are expecting a weak June/Sept. quarter, but have priced in a strong fiscal 2018 product cycle," UBS analyst Steven Milunovich said in a note Thursday. He expects the iPhone 8 to kick off a wave of upgrade activity in fiscal 2018, which starts Oct. 1.
Apple stock fell 0.7% to 149.50 on the stock market today, but once again found support at its 50-day moving average. It has formed a flat base with a buy point of 156.75 over the past 11 weeks.
IBD'S TAKE: Apple stock has an IBD Composite Rating of 80, meaning it has outperformed 80% of stocks in key metrics over the past 12 months. For more information on Apple, visit the IBD Stock Checkup.
Wall Street is forecasting iPhone sales of 41 million units in its fiscal third quarter and 46 million in the fourth. Analysts are split on whether the current fiscal quarter will include any sales of the new iPhone 8.
Apple is expected to introduce the iPhone 8 in September along with the iPhone 7S series, upgraded versions of its current LCD-screen handsets. The iPhone 8 is rumored to feature an OLED display, wireless charging, augmented reality capability and upgraded cameras and other improved components.
Needham analyst Laura Martin on Thursday reiterated her buy rating on Apple, calling it her "top stock pick for 2017." She has a price target of 165 on the stock.
"Apple's strategic position is second to none because it owns the mobile platform used by most of the wealthiest 15% of global smartphone users," she said in a report. "Revenue upside comes from the 10th-anniversary iPhone sales (including OLED phones at a big price increase) and stronger sales of watches, tablets and/or Macs."
Also, Apple's services business is undervalued, she said.
"Consumers perceive Apple products to be a tightly integrated ecosystem of content and hardware, which lowers churn and raises revenue per user," Martin said.
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