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Will iPhone Sales Boost Apple's Q4 Earnings?

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Technology stocks have helped lift the S&P 500 almost single-handedly in October, with the tech industry accounting for 75% of the index’s overall gains, according to Standard & Poor's.

In fact, five companies accounted for over half of October’s growth. One of these companies, Apple (AAPL - Free Report) , could be poised for another surge as it prepares to report its fiscal fourth-quarter results on Thursday.

The likes of Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) have already reported their most recent quarterly results, therefore Apple’s Q4 report is one the entire tech world will have their eyes on Nov. 2.

The iPhone maker will be under pressure to report strong fourth-quarter earnings and revenues in order to carry positive momentum into its holiday quarter, which will feature the release of the new iPhone X.

Investors might be happy to know that Apple’s Q4 revenues are projected to gain 9.22% to hit $51.17 billion, based on our current Zacks Consensus Estimates. As far as earnings are concerned, Apple’s EPS is expected to pop over 12% to reach $1.87.

But after Apple’s CEO Tim Cook met with Chinese President Xi Jinping in Beijing on Monday, Apple investors understand that details beyond simple earnings and revenue estimates are needed to gain a deeper understanding of the iPhone marker’s current health.

Thankfully, we can use our non-financial metrics file to better prepare ourselves for what to expect from Apple’s fourth quarter.

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

Based on our current non-financial metrics consensus estimates, Apple’s revenues in Greater China are set to gain 1.25% year-over-year. After a few years of lagging Chinese sales, based on greater competition and government intervention, Apple investors should be excited to hear that sales are expected to grow in the world’s second-largest economy (also read: Will Apple's China Sales Rebound This Quarter?).

On top of that, the rapid rise of Apple Music—the company’s streaming music service—is projected to continue.

Of course, most investors know that the maker of MacBooks, Apple Watches, and an array of other products and services has become beholden to the almighty iPhone. The smartphone regularly accounts for roughly 60% of Apple’s quarterly revenues.

In the third quarter, iPhone sales rose 1.55% to beat our sales estimates. Luckily for Apple and investors, this trend is set to continue as iPhone sales are expected to climb again in the fourth quarter. Based on our current consensus estimates, we expect iPhone unit sales will climb 2% year-over-year to hit 46.423 million.

This should please most Apple investors as Q4 only accounts for a portion of the new iPhone 8 sales. Maybe more importantly, the 10th anniversary iPhone X doesn’t factor into these expected gains at all, as it isn’t even set to launch until this Friday, Nov. 3.

Apple investors might also be happy to know that the company is currently a Zacks Rank #2 (Buy) and has topped earnings estimates in the trailing five quarters.

For more stock-moving estimates ahead of Apple’s Q4 report, check out our full guide: 3 Key Estimates for Apple's Q4 Earnings Report.

And make sure to check back here for our full analysis of Apple’s actual results later this week!

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