What to expect from Apple's Q3 2016 earnings | Cult of Mac

What to expect from Apple’s Q3 2016 earnings


Apple's Q2 earnings weren't that impressive.
Have iPhone sales finally bottomed out?
Photo: Jim Merithew/Cult of Mac

Apple is set to reveal its quarterly earnings this afternoon for the third fiscal quarter of 2016 and if the analysts are right, it could be even worse than Apple’s last disastrous quarter.

Investors were advised by Apple during the last earnings call that revenue will likely be down from what it was in the same quarter last year. Apple is hoping it can get a boost from the iPhone SE and the App Store to stay within expectations, however troubles in China and low iPhone demand could hurt the company more than expected.

Here’s what to watch for when Tim Cook and Luca Maestri talk to investors later this afternoon:

$41 billion

Apple projected it will make between $41 billion to $43 billion in revenue this quarter. Anything less would be a big disappointment for investors. Wall Street analysts think Apple will post $42.11 billion in revenue and earnings per share of $1.38.

Foreign Markets

China is now the second largest market for Apple and its hoping to make a big splash in India soon, though its run into problems in both countries. Growth slowed last quarter, so we expect Tim Cook will take some time to talk about the challenges of competing in a market that’s being dominated by cheaper rivals.


The biggest bright spot for Apple is that it’s starting to pull in a ton of money from the content it sells on the App Store, iTunes, iBookStore and Apple Music. Revenue from services in Q3 is expected to increase 18% compared to the year ago quarter, according to to Gene Munster who expects Apple to announce $5.9 billion in revenue.

iPhone 6 SE

Q3 is never a strong quarter for Apple, but Tim Cook will likely hype exciting future products like the new iPhone that will likely be announced in September. The iPhone still accounts for two thirds of Apple’s revenue, and according to FactSet, analysts forecast that iPhone sales dropped 16% in Q3 with only 40 million iPhones sold. The good news is analysts are predicting profits will increase to $47.5 billion next quarter thanks to the announcement of the next generation iPhone.

Per usual, Cult of Mac will be on hand to liveblog the entire earnings call to analyze all the numbers and juicy tidbits Cook and Maestri tell investors. So come back at 1:30PM and join us as we revel in a rare bad quarter for Apple.


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