When Apple Inc. (NASDAQ:AAPL) reports its September quarter results next month, one of the key things analysts will be paying close attention to is iPhone sales. According to analyst Chris Whitmore, demand for the iPhone 5S remains strong as stores in the U.S., the U.K. and Australia are having trouble keeping it in stock.
iPhone 5S demand going strong
He issued a note to investors with highlights from his most recent channel checks for Apple Inc. (NASDAQ:AAPL)’s two new iPhones. They have been on sale for a little over a week, and he said that 80 to 90 percent of the stores he checked in the U.S., the U.K. and Australia were out of stock of the iPhone 5S. He also notes that online ordering for most iPhone 5S models shows wait times of three weeks or more.
Supply of the iPhone 5C, however, is no problem at all as there appears to be plenty of those models available for purchase.
Apple could see a lift next quarter
While some remain concerned about the availability of the iPhone 5S, Whitmore believes this will lift Apple Inc. (NASDAQ:AAPL)’s earnings results for the December quarter. In addition, he estimates that both the iPhone 5S and 5C offer better margins, so Apple Inc. (NASDAQ:AAPL) should see its gross margins improve as well. According to his estimations, the iPhone 5S will contribute about 1 point of additional margin, while the iPhone 5C will contribute about 50 basis points of margin.
He expects that the two new handsets will be immediately accretive to Apple Inc. (NASDAQ:AAPL)’s corporate margins and probably even improve as time goes on, thanks to ramps in volume and improvements in supply chain efficiency.
He notes that with new iPad models expected in October, Apple Inc. (NASDAQ:AAPL) could deliver a very strong holiday quarter. Whitmore maintained his above-consensus estimates of $44.63 per share in earnings for fiscal year 2014, compared to the Wall Street consensus of $43.09 per share.