Apple Inc. (AAPL) Earnings Preview: How Many iPhones Shipped?

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Wall Street expects Apple (AAPL) to beat its revenue guidance in tonight’s earnings report

Apple is among the list of technology companies scheduled to release their next earnings reports after closing bell tonight, following Microsoft’s disappointing report last night. Analysts have been lining up their preview reports ahead of tonight’s print. Unsurprisingly, they’re expecting a lot from the consumer tech giant.

Surveying analysts on Apple

Fortune’s Philip Elmer-DeWitt released the results of their most recent survey on Apple’s (NASDAQ:AAPL) earnings. The company guided for between $63.5 billion and $66.5 billion, but analysts are expecting more.

Fortune polled 20 professional analysts and 15 amateurs and found that the average estimate for Apple’s (NASDAQ:AAPL) first fiscal quarter is sales of $68.3 billion, a 21% year over year increase.

Apple stock could fall, warns BGC

In a report dated Jan. 26, BGC analyst Colin Gillis updated his projections for Apple’s December quarter, which is expected to set a new record thanks to the iPhone 6 and iPhone 6 Plus. Even though Apple is expected to report such strong results, however, he cautions that the company’s shares have declined with the last couple of earnings beats.

In the December 2013 quarter, Apple also reported record results, and its shares fell 8%. The year before that, the company also saw a new record, and shares fell by more than 12%. Gillis points out that currently, shares of Apple are within 6% of their $119 per share high (adjusted), which they hit on Nov. 26, 2014.

iPhone sales to drive Apple’s strong results

Gillis believes the smartphone market is essentially turning into the phone market as more and more consumers switch from feature phones to smartphones. He has pointed out in the past that Apple (NASDAQ:AAPL) is still very dependent on the iPhone, with potentially as much as 65% of its revenue coming from the iPhone in the December quarter.

He estimates that Apple (NASDAQ:AAPL) sold 66.5 million iPhone units during the quarter with an average selling price of $685. He thinks in order to push shares materially higher, Apple (NASDAQ:AAPL) must have sold at least 70 million iPhones during the quarter. The BGC analyst has a Hold rating and $103 per share price target on Apple.

In their report also dated Jan. 26, JPMorgan analysts Rod Hall, Ashwin Kesireddy and Rajopal Raghunathan agreed with Gillis and most of the rest of Wall Street in saying the iPhone will drive Apple’s results. They believe the company shipped 64.8 million iPhone units but say there could be some upside to that estimate because supply may have caught up with demand toward the end of the quarter. For the current quarter, they estimate shipments of 52.9 million iPhones.

Other key metrics in Apple’s earnings report

The JPMorgan team also expects Apple (NASDAQ:AAPL) to report strong iPad shipments of 23.95 million in the December quarter. For the current quarter, they’re estimating shipments of 16.5 million iPads.

The analysts expect to see Apple’s total revenue come in at $51.9 billion, compared to the consensus estimate of $53.7 billion. They’re expecting a GAAP gross margin of 37.8%, slightly behind consensus at 38.5%, and GAAP earnings per share of $1.86, compared to the consensus of $1.99 per share.

JPMorgan has an Overweight rating on Apple.

As of this writing, shares of Apple (NASDAQ:AAPL) were down 1.46% to $111.45 per share ahead of tonight’s earnings report.

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