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3 Key Predictions for Apple's Q3 Earnings Report

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Although critics will say that Apple (AAPL - Free Report) has lost some of its luster over the past few years, you better believe that investors will be paying attention when the world’s largest publicly-traded company releases its fiscal third-quarter financial results next week.

Apple has been one of Wall Street’s hottest stocks this year, but its scorching pace has slowed over the past two weeks as investors finally seem to be exercising some caution. The company appears to be having a supply chain issue that could threaten the release date of the iPhone 8, and concerns about a decorrelation effect tripped up several of our market leaders this week.

But neither of those potential issues should have a direct effect on the company’s upcoming earnings report, which is scheduled to be released after the closing bell on Tuesday.

So what’s in store for Apple this quarter? Well, our current Zacks Consensus Estimates are calling for earnings of $1.57 per share and revenue of $44.71 billion—results that would represent year-over-year growth of 10.56% and 5.55%, respectively.

Of course, earnings and revenue are just two of the many things investors will be looking at when Apple reports. Check out these three additional things to expect:

These consensus estimates are from our exclusive non-financial metrics estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>

1.       iPhone Sales Will Reach 40 Million Units

According to our consensus estimate, iPhone unit sales are projected to come in at 40.76 million this quarter. That would be a slight uptick from the 40.40 million units sold in the prior-year quarter, and considering the anticipation for Apple’s yet-to-be released models, any growth at all would be an encouraging sign for investors. Last quarter, Apple sold about 50.8 million phones, which missed our estimate of 51.2 million and slipped about 1% year-over-year.


2.       China Revenues Will Rebound

Much has been made about Apple’s slumping revenues in the Greater China region, especially as regulatory pressure and competition from domestic manufacturers has increased over the past few years. In the second quarter, Apple’s revenues in the region slumped roughly 14%. However, according to our consensus estimates, the company could be in store for a slight turnaround. In fact, the latest figures are calling for revenues in Greater China to touch $9.36 billion, which would represent respectable growth of 5.8% from the prior-year quarter.


3.       Services Unit Will Continue Its Explosion

Led by the insane growth of Apple Music, the company’s music streaming service that reportedly has more than 40 million users, Apple’s Services unit is expected to continue its insane growth. According to our latest consensus estimate, the segment is projected to bring in revenues of $7.07 billion this quarter, up more than 18% from the $5.98 billion that was recorded last year. That 18% growth rate was what Apple posted last quarter, so it will be interesting to see whether the company can continue this momentum.


Make sure to check back here for our full report once Apple reports on Tuesday!

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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