Apple Inc. (NASDAQ:AAPL) is set to release the earnings results for its fourth fiscal quarter, which ended on Sept. 24, after closing bell tonight. Wall Street is predicting adjusted earnings of $1.65 per share on $46.9 billion. In the same quarter last year, the iPhone maker reported $1.96 per share in adjusted earnings on $51.5 billion in sales.

Along with its last earnings report, Apple Inc. (NASDAQ:AAPL) guided for September quarter sales of $45.5 billion to $47.5 billion and a gross margin of 37.5% to 38%.

Apple AAPL Stock

Any hints about iPhone 7 sales?

Although the September quarter was still too early to get a good feel of how iPhone 7 sales are going, it should provide some clues. The quarter included about two weeks of sales for Apple Inc. (NASDAQ:AAPL)’s newest phones, and mobile carriers in the U.S. were heavily promoting the phones right out of the gate. Two of the four biggest carriers reported significant increases in preorders for the iPhone 7 line this year as compared to last year, although Verizon, the biggest carrier, didn’t see any huge uptick in orders.

Along with its earnings release, however, the carrier did say that it saw an iPhone backlog in the third quarter, with most of that backlog being from upgrades. This suggests that demand for the iPhone 7 exceeded supply during the first two weeks of sales, which is something Apple Inc. (NASDAQ:AAPL) had warned about. Goldman Sachs analysts said last week that delivery times for this year’s models have remained consistently high for all top tier U.S. carriers since the launch.

Analysts estimate that the company sold about 45 million iPhones during the September quarter, which is a decline of about 3 million compared to the year-ago quarter. If Apple Inc. (NASDAQ:AAPL) doesn’t grow the unit number, it would be the third consecutive quarter in which iPhone units declined year over year. Many expect Apple Inc. (NASDAQ:AAPL) to benefit from Samsung’s Galaxy Note 7 recall, although a few expect little to no impact because they believe buyers or would-be buyers of the Note 7 would opt for another Android phone rather than the iPhone 7 Plus.

AAPL may still be struggling in China

Investors and analysts will also be trying to gauge Apple Inc. (NASDAQ:AAPL)’s efforts in China. The market is a very important one because of its massive size, but the company has struggled there for the last two quarters even though domestic brands have been experiencing strong growth.

UBS analysts noted last week that Apple Inc. (NASDAQ:AAPL) has lost market share in China so far this year, blaming product cycles and macro conditions and suggesting that the decline in share could be temporary. UBS analysts believe macro conditions could be contributing to the decline in market share but that there are more important factors when it comes to the company’s efforts there.

For example, OPPO, Vivo and Huawei are offering phones at much lower prices, and their advertising efforts have been on the rise as offline distribution strengthens. Also Chinese consumers are apparently becoming less embarrassed to own a phone made by a domestic brand. And while Apple Inc. (NASDAQ:AAPL)’s brand remains strong in China, UBS’s Asia telecom analyst said it can be difficult for consumers to access the App Store, which also tends to be very slow.

UBS analysts said their distributor checks in China indicate that sales of the iPhone 7 are even weaker than sales of the iPhone 6s were out of the box. The penetration rate of high-end phones is now at 80% to 90%, and users have been hesitant to upgrade because of the perceived lack of innovation with the iPhone 7. Further, carrier subsidies in China declined 30% in 2014 and 40% last year, although they’re stable this year.

Apple’s holiday quarter outlook will be key

Apple Inc. (NASDAQ:AAPL) management is also expected to provide guidance for the December quarter, so analysts and investors will be anxiously waiting to hear the sales outlook. Analysts are looking for $74.9 billion in revenue for the company’s first fiscal quarter, which is a decline of $1 billion from last year’s December quarter. If the company guides above that mark, it could mean that sales of the iPhone 7 are actually going better than what analysts believe.

Shares of Apple Inc. (NASDAQ:AAPL) stock edged upward by as much as 0.28% to $117.98 during regular trading hours on Tuesday.