Apple may pleasantly surprise after the bell

The company has already said that revenue and margins may come in at the high end of its range for the quarter.

By Benzinga Oct 28, 2013 12:30PM

The Apple Inc. logo is displayed on the back of the new MacBook Pro David Paul Morris/Bloomberg via Getty ImagesBy Tim Parker

Apple (AAPL) is scheduled to report earnings Monday after the closing bell.

In true Apple style, it will play its normal "fashionably late" game where it doesn't report until 5 p.m. ET. An Apple earnings report is arguably the most talked about of any report each season, but two recent product launch events may overshadow Monday’s announcement.

Here's what to expect:

Analyst consensus calls for Apple to report fourth-quarter earnings of $7.88 per share on revenue of $36.67 billion. Fiscal first-quarter guidance is for $13.86 per share and revenue of $55.65 billion.

On Sept. 23, the company announced that it had sold 9 million iPhone 5s and 5c models during their first three days of availability. What wasn’t widely reported at the time was that the company expected revenue and gross margins for the quarter to fall in the high end of the guidance range it provided last quarter.

That range was for revenue of $34 billion to $37 billion and margins of 36 to 37 percent. With that announcement, Apple set itself up for some high expectations. That, along with a recent surge in the stock, gives this announcement a different tone than the previous few where investors were expecting the worst but were happy with any glimmer of hope that Apple hadn't lost its ability to be an industry leader.

With Apple, the normal headline numbers aren’t the only important numbers. Investors want to see how its key products performed. Fortune reports that consensus calls for reports of 33.4 million iPhones shipped, 13.9 iPads, and 4.2 million Macs.

The new line of iPhones were on sale for only eight days of the quarter, so don’t expect any solid data indicating longer-term demand. Still, analysts and investors will inevitably have questions about the issue.

Is 5c demand as low as some are reporting and is 5s demand that strong? Has the company really ramped up production of the 5s nearly 75 percent, as some reports suggest?

How about the new retina iPad mini? Apple didn’t provide a specific ship date and there’s speculation that the retina displays are in short supply. Apple indicated mid-November, but a more firm timeline would help to address the supply chain concerns.

And of course, China. News on a China Mobile (CHL) deal isn’t likely but would be a welcome surprise. Investors would also look favorably on numbers from China and other countries that might show Apple gaining share in key markets where it has struggled to gain a solid foothold.

Disclosure: At the time of this writing, Tim Parker was long Apple.

Read more from Benzinga

Oct 28, 2013 2:54PM
I'll try to start this post with the typical response you get from the Droid-noids:

Apple sucks. My phone does everything theirs does and isn't as overpriced. Besides, they use foreign labor.

(Yeah....imitation is the sincerest form of flattery and who doesn't outsource their electronics?)....Yawn.....

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