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Apple earnings: What to watch for

January 23, 2013|By Andrea Chang
  • Apple Inc. will report its fiscal first-quarter earnings after the closing bell Wednesday.
Apple Inc. will report its fiscal first-quarter earnings after the closing… (Andrea Chang / Los Angeles…)

Apple Inc. reports its fiscal first-quarter earnings after the closing bell Wednesday. With the tech giant's shares falling as of late, and worries about demand and supply constraints for the iPhone 5, we're expecting the company's performance to be carefully dissected by analysts and investors. Here's what to look for:

Apple has told Wall Street analysts that for its first quarter, which ended in December, investors should expect the company to report $52 billion in revenue and earnings of $11.75 a share. The consensus among Wall Street analysts is that Apple will report $54.7 billion in revenue and $13.41 a share in earnings.

We're interested to see if the smaller-and-cheaper iPad mini, released in early November, cannibalized sales of Apple's larger-size iPad. Analysts estimate Apple shipped 23 to 24 million iPads during the quarter.

Similarly, we'd like to know whether consumers flocked to the iPhone 5 the way they did for previous generations of the smartphone, or if many bought older models such as the iPhone 4S. The average selling price for iPhones during the quarter should provide some insight there. Analysts estimate Apple sold 46 to 47 million iPhones in its first quarter.

Apple could hint at its upcoming plans for cheaper iPhones, new iPads and possibly some long-awaited TV news, although it seems unlikely for the typically tight-lipped company. Still, expect analysts to try their best to finagle information from Tim Cook and other company executives during the question-and-answer portion of today's earnings call. 

For the current quarter, expect Apple to be especially conservative when it provides guidance. The Cupertino, Calif., company has a habit of setting expectations low so it can outperform down the line.

Apple will hold an earnings call for analysts at 2 p.m. Pacific time after the release of its quarterly report. Barclays analyst Ben Reitzes said the call will be "the most important conference call in years."

Shares of Apple were up $6.15, or 1.2%, to $510.92 at 10:50 a.m. Pacific time.


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