Can Apple Save Tech? (Earnings Come Monday)

Thanks largely to Thursday’s disappointing earnings reports from Microsoft (MSFT) and Google (GOOG), sentiment on tech stocks was terrible on Friday, driving down share prices across the board. One notable victim was Apple (AAPL), which fell $6.66 (Satanic!), or 3.9%, to $165.15. Apple, as it happens, provides the next big milestone for tech investors after the close on Monday, when it reports earnings for its fiscal third quarter ended June. The Street is looking for revenue of $7.36 billion and profits of $1.08 a share. The company’s guidance was for $7.2 billion and $1 a share.

Gene Munster, analyst with Piper Jaffray, wrote in a note earlier today that the key to the quarter will be Mac sales: he sees 2.35 million units, which he says is ahead of the Street consensus of 2.2 million. He expects 10.5 million iPods for the quarter, versus the Street at 10.3 million. He puts iPhone units for the quarter at 730,000. If the company hits those numbers and turns in a gross margin of 33%, he says, Apple would post $7.67 billion in revenue and profits of $1.13, well above both the guidance and the Street.

Mark Moskowitz, an analyst with J.P. Morgan, upped his EPS estimate for the quarter late yesterday to $1.08, from $1.03, bringing him in line with the consensus. He upped his FY 2008 estimate to $5.19 from $5.08; for 2009 he goes to $6.06 from $5.90.

A strong quarter for the Mac could both shift the market’s single-minded focus on the iPhone back to the larger picture for the company, and perhaps improve sentiment on the sector more broadly.

If you think you have the inside track on what the company will report Monday, you can ensure gloating privileges by posting your best guess in the comment section below. The key numbers: June quarter revenues, EPS and gross margin, plus units sales for Macs, iPods and iPhones, as well as revenue and EPS guidance for the September quarter.

Comments

[Paul G]

1.19/share

[Oh Blah DeeBlah Dah]

$1.14 per share

[Stephjen]

dunno, but hope that the IV jumps on the options so i can sell what i hold before earnings!

[Moses]

1.ihavenoideandneither...

[GuansterMonster]

I'll take $7.7bn and $1.14, Bob, driven mainly by Mac sales.

[singh]

who will buy so expensive MAC when gas is 4 dollara a gallon?

[Brian inMontreal]

Singh, my spouse did, silly me I've been filling the minivan, the car, and my motorcycle (the only thing I'm allowed to drive). What was I thinking ?
But actually she explained it's one MAC or 3 more PC, and the newest ones have Vista. She had a point. So thanks to Vista I'm going higher than the whisper number that's 1.11 apparently to 1.13 revenues is even harder it depends on cost and there is no inflation number that can be used, unless you use China's (probably more accurate for the USA) 7.63B.

[deasys]

@Singh: Those that don't want to have to buy a new PC every 18 months? People that are fed up with Windows? Folks that finally realize there is a real alternative? People that work at home and thus don't have to commute?

Could be lots of new customers there for Apple, Singh...

[John Egan]

Mr. Singh; The same people that buy IPhones. I'd like to say the same people that buy IPODs, but.. Well, I own one... Seriously, Macfanatics and schools buy Macs.

Thx jegan ;-)

[optionsgirl]

Apple changed their accounting to comply with Sarbanes -Oxley current tax law, and so some of their profits will be deferred into 2009 and 2010. This is a huge plus for the future. Look beyond the earnings report Monday. Apple will continue to be a leader and innovator, even if the shares have been stomped for now. Anyone who owns apple should buy some puts to help navigate this volatile environment.

[optionsgirl]

ps- these comments about "who can afford a Mac" are just ridiculous. We have several, replaced our Dell/Vista horrors in our home office. No repairs and great support. Great graphics and very intuitive --easy to use. Apple has never catered to those who are looking for bargain- bin prices. We bought a Mac for our daughter in high school and she used it through her college graduation. Now, she has a new macbook and desktop computer-- and those will probably last another 6 years. I am typing this from a MacBook Pro. It's a great machine.

[User 112196]

no body knows what will happan on monday --------------------no body

[steveballmer]

NO! Only Microsoft can and is saving tech!