Apple FQ3 2017 earnings are set for release on Tuesday, but the one thing investors and analysts will be looking for more than anything else in the report is management’s guidance for the September quarter. That guidance could suggest whether or not the OLED-equipped iPhone 8 will be delayed, a point that’s been up for debate for most of the year. Despite the extreme focus on Apple’s guidance, the fact is that the company is releasing earnings, so there are still a few other things to watch for.

 

apple fq3 2017 earnings
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What to expect from Apple FQ3 2017 earnings

The consensus estimate for Apple FQ3 2017 earnings stands at $1.57 per share on $44.92 billion in revenue. The company guided for sales of $43.5 billion to $45.5 billion. Wall Street expects a gross margin of 38.2%, which is toward the top of Apple’s guidance of 37.5% to 38.5%. Analysts want to see $25.5 billion in iPhone revenue on 40.8 million units with an average selling price of $620.

In a note to investors earlier this week, Stifel analyst Aaron Rakers said that his intra-quarter data analysis pointed to only 38 million to 40 million iPhones shipped during the June quarter. He also offered several areas he will be watching in the Apple FQ3 earnings report, other than clues about the iPhone 8, of course.

Greater China in Apple FQ3 2017 earnings

For example, Rakers pointed to stabilization of demand in China, noting that Apple is up against a much easier comparison this time around. The iPhone maker has been struggling there despite many efforts to woo Chinese consumers. In the March quarter, Apple’s Greater China revenue tumbled 14% year over year, and in the December quarter, sales in the region were down 12%.

Most analysts agree that Apple needs to convince more Chinese to buy its phones, although it has been suggested that the iPhone 8 will be so magnificent that they will indeed buy it. Rakers reported that his intra-quarter data analysis suggested continued weakness in China during the June quarter as Chinese consumers hold off purchasing a new phone until the iPhone 8 comes out.

Watch Apple’s Services revenue

Other than China, the Stifel analyst also expects Services revenue to be a key focus in Apple FQ3 2017 earnings. He predicts that the company’s management will probably emphasize strong growth in this segment, just as they have been doing over the last several quarters. Consensus estimates peg Apple’s Services revenue at $7.07 billion during its third fiscal quarter.

He estimates that the App Store contributes 30% to 35% of Apple’s Services revenue. He also expects Apple’s Services business to continue the strong momentum it has shown in the weak of the 18% year over year growth recorded in the March quarter. Rakers is interested in hearing commentary on iTunes after the reported market share loss.

Apple management has said they expect Services revenue to double over the next four years. In the long term, Credit Suisse analyst Kulbinder Garcha sees Apple’s Services revenue reaching $52 billion “driven by a high quality, affluent, digitally transaction user base of 1.1bn devices and around 650 million users.”