Apple Inc. Earnings Preview: Estimates Toward Top Of Guidance

Apple Inc. (NASDAQ:AAPL) is scheduled to release its next earnings report tonight after closing bell, and all of Wall Street is watching, as usual. Analysts are expecting a lot out of Apple this time around, with sales estimates hovering very close to the top end of Apple’s guidance for its fourth fiscal quarter.

Although it’s early to gain any real insight on how popular the iPhone 6 and 6 Plus are this year, we could get some clues.

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What to expect in Apple’s earnings report

On average, analysts are expecting earnings of $1.31 per share on $39.9 billion in revenue. The earnings estimate assumes a 10% year over year gain, while the sales estimate reflects an approximately 6% increase. Apple guided for revenue to be between $37 billion and $40 billion.

Apple guided for gross margins of between 37% and 38%, and Wall Street expects the result to be on the high end.

Estimating Apple product sales

On average, analysts are expecting that Apple will report sales of 38% iPhones during the September quarter, which reflects about a 12% growth rate. We already know that Apple sold over 10 million iPhone 6 and 6 Plus units over opening weekend.

So the questions are going to be how many more of the new handsets the company sold in the days after opening weekend but before the end of the quarter and also how many older models Apple sold before the launch of the two new iPhones. Of course the company does not break iPhone sales down by model, but the overall number should give us a clue about just how popular the two new iPhones are.

Analysts are looking for about 13 million iPad units.

What else Wall Street wants from Apple

On the topic of guidance, Wall Street wants to hear Apple say it expects revenue of about $63.5 billion, which represents a growth rate of about 10%.

Investors also want to hear about Apple’s share repurchase plans. Carl Icahn reignited the fight he took to Apple last year, pushing for more share buybacks from CEO Tim Cook. This month he sent another letter to Cook, urging even more share repurchases.