Next month, Apple (NASDAQ:AAPL) is set to report its financial results for the fourth quarter of its fiscal 2018 and issue financial guidance for the Q1 of fiscal 2019.
Let's look at the key metrics analysts and investors will be watching, and what numbers analysts are expecting to see when the results go live.
The final quarter of fiscal year 2018
When the company issued its guidance for Q4, it told investors to expect revenue of between $60 billion and $62 billion. The analyst consensus calls the for the company to report $61.44 billion in revenue and $2.77 in earnings per share -- up 16.9% and 33.8%, respectively, year over year.
While investors should pay attention to these numbers, it's important to remember that Apple's Q4 ended on Sept. 29, meaning the results incorporate only nine days of iPhone XS and XS Max sales and no iPhone XR sales.
In short, the results mostly represent the last hurrah of the last iPhone product cycle. That's why I'm more interested in the projections the company provides for the following quarter.
For Q1 2019, analysts are expecting the company to turn in a whopping $92.67 billion in revenue and $4.93 per share in earnings, representing 5% and 26.7% year-over-year growth, respectively.
Apple's high-end iPhone XS and XS Max devices will be available throughout the entirety of the quarter, but the lower-end iPhone XR, the device that's expected to be the most popular model in the lineup, won't be available in stores until Oct. 26, with preorders starting on Oct. 19.
What's potentially more interesting with respect to the iPhone XR is that at least one analyst, Ming-Chi Kuo with TF International Securities, seems to think the device will have staying power into the following quarter.
Here's what Kuo had to say, as reported by MacRumors:
We expect XR shipments to beat low seasonality in 1Q19. We forecast that XR shipments in 1Q19 will decline 25-30% QoQ [quarter over quarter] to 27-30mn units, and we attribute the lower XR shipment QoQ decline, compared with general consumer electronics and smartphones' 30-40% QoQ decline, to better replacement demand and production delay. Also, XR's shipment QoQ decline in 1Q19 will be better than the iPhone 8 series' 45-50% in 1Q18.
Since Apple doesn't provide guidance for more than one quarter, we won't know whether Kuo's analysis was correct until the company reports its Q1 results, during which the company would provide financial guidance for the following quarter.
Beyond the headline numbers
Although many will be interested in the consolidated financial results Apple reports, I'm interested in seeing if the services business was able to continue its strong momentum. Some insight into how the Apple Watch is doing would be most welcome, since Apple should have a good idea by now of how well the Apple Watch Series 4 is being received.
I'll be back with in-depth analysis of the quarter and more after the company reports its results on Nov. 1.