Apple Inc. (AAPL) To Report Strong Q1 Results And Q2 Guidance

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Apple Inc. (NASDAQ:AAPL) is expected to report its Q1 2014 results on Monday, January 27. Jefferies analyst Peter Misek said that the company is likely to report strong first quarter results and second quarter guidance on January 27. Related to this, Jefferies increased its revenue and earnings estimates for Apple Inc. (NASDAQ:AAPL).

Apple to issue strong Q2 guidance

Misek expects Apple Inc. (NASDAQ:AAPL) to have sold 25 million iPads and 55 million iPhones in the first quarter ending December 31, in line with Wall Street consensus. However, Misek increased his revenue estimate from $55.9 billion to $57.1 billion, and his EPS estimate from $13.68 to $14 due to strong sales of iPhone 5S. Jefferies’ proprietary Apple Supplier Tracker increased 28% QoQ, similar to 29% in Q4. The Apple Supplier Tracker is based on Apple Inc. (NASDAQ:AAPL)’s Taiwanese suppliers that collectively have more than 40% exposure to the tech giant’s revenue. Foxconn Technology Co., Ltd. (TPE:2354)’s, the biggest supplier to Apple Inc. (NASDAQ:AAPL) witnessed a 45% QoQ growth in shipments, compared to just 30% in the same period last year.

Jefferies also expects Apple Inc. (NASDAQ:AAPL) to issue strong Q2 guidance. The research firm’s recent checks suggest that iPhone builds for January-March quarter have been increased to mid-40 million range due to the deal with China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:0941). But the company has changed its product mix slightly by reducing the production of 5C, while increasing those of 5S and 4S. Second quarter gross margins are expected to rise 120 basis points to 38.6%. Jefferies has a Buy rating on the stock with $650 price target.

Apple shipped 1.5 million iPhone 5S to China Mobile

Piper Jaffray analyst Gene Munster recently said that Apple Inc. (NASDAQ:AAPL) investors will be focused on the future guidance. That’s because the upcoming release of the iPhone on China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:0941) will be the key topic. Apple Inc. (NASDAQ:AAPL)’s second quarter guidance is likely to see an increase based on the deal with Chinese carrier. Munster expects the Cupertino-based tech giant to sell at least 3 million iPhones through China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:0941) between January and March. Media reports suggest that Foxconn Technology Co., Ltd. (TPE:2354) has already shipped about 1.5 million units of iPhone 5S to the world’s largest telecom carrier.

For the December quarter, Munster expects Apple Inc. (NASDAQ:AAPL) to report $58 billion in revenue, $14.35 a share in earnings, with iPhone sales surpassing 57 million units.

Apple Inc. (NASDAQ:AAPL) shares surged 1.29% to $553.45 in pre-market trading Wednesday.

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