Apple Inc. FQ4 2017 Earnings: Prepping For A Disappointing Outlook

Apple Inc. FQ4 2017 Earnings: Prepping For A Disappointing Outlook
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The Apple Inc. (NASDAQ:AAPL) FQ4 2017 earnings results are due after the bell on Thursday, but you would hardly know it because of how much of the analyst commentary has focused on the iPhone X. That said, the consensus currently stands at $1.87 per share in earnings on $50.8 billion in sales for Apple’s fourth fiscal quarter. In the year-ago quarter, Apple reported earnings of $1.67 per share on $46.85 billion in revenue.

Apple FQ4 2017 earnings

As always, iPhone unit numbers will be a focus for the Apple FQ4 2017 earnings release, although this time around, the number will probably be a bit less important than it has been in the last couple of years. The Street estimates that Apple shipped 46 million iPhones during the quarter, although the iPhone X is really the only model analysts care much about, and it won’t start landing until Friday.

Preorders for the phone started last week, putting all iPhone X sales comfortably in Apple’s first fiscal quarter. That means Wall Street will have to wait until next year for a glimpse of just how well the ultra-pricey iPhone model is selling unless Apple management offers up some real, concrete numbers. Typically, Apple CEO Tim Cook is rather oblique with his responses, allowing the media to take and run off with whatever conclusion they’ve jumped to.

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The Apple FQ4 2017 earnings report will cover about a week of iPhone 8 and 8 Plus sales, however, so that could be good or bad for the company. Early response to the two phones looked rather weak, although most analysts argued that it doesn’t really matter because the iPhone X is everything. Unfortunately though, this puts every last one of Apple’s eggs in that one basket, so if the supply chain doesn’t start cranking out massive truckloads of phones, or if consumers don’t want to pay over $1,000 for an iPhone, then Wall Street will be in for a heap of disappointment next year.

Why guidance matters more than FQ4

Because of how important the iPhone X is being seen, the guidance will be the most important part of the Apple FQ4 2017 earnings release. Even if the company doesn’t offer any commentary on how preorders went, analysts will be dissecting the guidance numbers for any clues. In the first quarter of Apple’s fiscal 2017, it reported $78.4 billion in sales, which basically means that analysts will want the midpoint of the company’s outlook to be higher than that. However, some estimates put the company’s holiday quarter sales as high as $85 billion, which could mean that Apple will disappoint in the one place it needs to impress the most.

Even RBC Capital analyst Amit Daryanani, who envisions a “superlong” iPhone cycle for the iPhone X, warned that the Apple FQ4 2017 earnings report might disappoint on guidance. However, he also said in a note this week that whatever range that guidance ends up being only points to what management expects their available supply will be and not true demand.

Apple stock declined by as much as 1.42% to $166.64 on Wednesday.

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