Apple Earnings Could Disappoint on Low iPhone Sales

Apple Earnings Could Disappoint on Low iPhone Sales

Apple Inc. (NASDAQ:AAPL) is going to report its third quarter results on Tuesday, July 24. Analysts predict that the company will report a slight decrease in iPhone sales, because the device was launched last year, and most recently Samsung’s Galaxy S3 is giving it a tough competition. During an interview with CNBC, Toni Sacconaghi, of Sanford Bernstein, said that Apple Inc. (NASDAQ:AAPL) could miss the estimates due to low iPhone sales.

But iPad will make up for the difference. The latest version of iPad was launched about two weeks before the beginning of the third quarter. First and second quarters of this year have been strongest for the company. Combined earnings for the last two quarters equaled the total sales of FY11.

Brian White of Topeka Capital estimates iPhone sales to touch 30.9 million units in April-June quarter, which is 52 percent higher than its sales in the same quarter last year. The company had shipped 35 million units in the second quarter. Investors expect that Apple will likely give a clue about release of iPhone 5.

iPad sales are expected to be much stronger, as its latest version was launched just two weeks before the third quarter began. Brian White expects it to jump 72 percent from the third quarter last year, to 15.9 million units.  He says that Apple Inc. (NASDAQ:AAPL) will generate $8.8 billion in revenue from tablet sales.

The Cupertino, California-based electronics giant may see an increase in MacBook sales. The company launched upgraded versions of MacBook Air and MacBook Pro during the third quarter. White says that the shipment of Macs may go up to 4.6 million units worldwide, 17.6% higher than the sales in the same quarter a year prior. Apple realizes that Mac sales are affected by iPad, but it is difficult to estimate the units of lost Mac sales due to iPads.

Apple’s total revenue for the third quarter is expected to be $38.9 billion, in which, iPhone alone will account for 50 percent, iPad 24 percent and MacBooks 16 percent. Apple’s official estimate is a revenue of $34 billion and $8.68 earning per share.

If you think that the company’s best financial performance is over, then think again. Sales are likely to set another record in the fourth quarter as Mountain Lion OS, the new iPhone 5 and a highly anticipated iPad Mini are lined up for release.