The executive summary is that the analysts are pessimistic, though in line with Apple’s guidance.
Earnings [per share] estimates are down across the board — anywhere from -7% year over year (according to independent Patrick Smellie from the Braeburn Group) to -29% (Susquehanna’s Chris Caso) …
There is consensus that year-on-year revenues will be either flat or slightly down, but interestingly the consistency we saw in the predicted numbers for Q2 (which turned out to be under-estimates) have disappeared.
In general, the convergence we saw developing in Q2 has started to reverse. In April, the gap between the pros’ and the amateurs’ revenue estimates was just 1.3%. Now they seem to be drifting apart again. The revenue gap for Q3 has more than doubled, to 3.5%. On earnings, the two groups are, on average, 7.1% apart.
Here’s the full set of estimates (institutional analysts in blue, independents in green, Apple’s high and low guidance in red):
As always, it’s the institutional estimates that tend to drive the share price, so the key numbers the market is looking for in terms of sales are these:
And translated into the financials:
Gross margin: 36.6 percent
Earnings Per Share (EPS): $7.29
If Apple hits or beats these numbers, the stock price will likely rise; if performance falls short, the stock price likely falls.
If you want to listen in to the call, Apple is offering a streaming audio link.