The first big Apple earnings report for 2018 is nearly here. And, based on analysts’ expectations, it will likely be Apple’s biggest moneymaking quarter ever.
After weeks of waiting, investors will finally get their first look at how well the iPhone X is selling. Apple’s holiday sales probably hit historic levels. But with recent reports that Apple slashed iPhone X orders in half, there could be quite a few surprises in store.
As usual, Cult of Mac will be here to liveblog all the action as it transpires on Thursday, February 1, at 2 p.m. Pacific. Get ready to watch for these six things during the call:
iPhone average selling price
Apple’s Q1 earnings cover the holiday season for 2017, which is always the company’s strongest quarter for iPhone sales. iPhone X shipping times quickly slipped to a five-to-six-week wait after launch, indicating demand could be higher than ever. Everyone’s going to be looking at how many units were sold, but there’s a more important metric to look for.
Investors will be looking to see if the iPhone X pushed the average selling price up past $700 for the first time ever. Some analysts think the ASP could rise well above that level. On average, analysts expect Apple to have sold 79 million iPhones during the quarter, generating $59.7 billion in revenue. That’s up just 1 million units from the same quarter last year, but the higher price could yield better-than-expected results.
Insane Apple revenues
With sales at an all-time high on the most expensive iPhone ever, Apple should have no problem meeting its revenue goal for the quarter. Apple told investors it expects to make between $84 billion and $87 billion in revenues for the quarter. Wall Street is hoping revenues come in around $86.8 billion, up 11 percent from a year ago.
Repatriated Apple cash
Apple’s massive pile of overseas cash can be brought back to the United States at a much cheaper rate due to the recent tax overhaul. Investors are anxious to see how Apple plans to spend that money, but the company has been pretty tight-lipped so far. In order to bring the money back home, Apple will have to pay a $38 billion repatriation charge. It’s unclear if the company will pay it all at once, or exactly how much cash it’ll bring back. With over $200 billion in cash on hand, the company is poised to make some huge acquisitions. Or invest the money into some big new projects.
After years of slipping sales, the iPad is starting to show it’s got legs again. Even though Apple hasn’t released a new iPad in months, investors believe sales should go from $5.5 billion last holiday quarter to $6.1 billion during Q1 2018.
Apple growth in China
Apple finally returned to growth in China last quarter after seeing its position in the country slow the last two years. Sales might be about to boom again, according to Morgan Stanley analyst Katy Huberty. She predicts Apple will have “accelerated market share gains for the iPhone in China.” The consensus among analysts is that revenues from China should grow nearly 10 percent for the quarter, indicating Apple is positioned to take off again in 2018.
Apple services still booming?
Most of the focus on the Q1 2018 earnings call will be on iPhone sales figures, but don’t ignore Apple’s booming services business. Revenues from the App Store hit an all-time high during the seven-day period from Christmas Eve to New Year’s Day, and analysts say it should be a huge boost to Apple’s bottom line. Revenues are expected to grow 23 percent to $8.7 billion for the quarter, pushing Apple to better results.