updated 06:40 pm EDT, Thu July 19, 2007
Q3 earnings expectations
In its third-quarter financial results, due on July 25th, Apple is expected to earn 72 cents a share on revenue of $5.29 billion, up from 54 cents a share on $4.37 billion in sales posted in the same quarter a year ago according analysts surveyed by Thomson Financial. In its second quarter, Apple announced revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share.
Though Apple likely moved between 500,000 and 1 million iPhones in the quarter, Gene Munster of Piper Jaffray thinks Apple will only recognize about $12 million in sales from the iPhone, meaning the device "will not be material" to Apple's results this time. As previously reported, Apple will recognize revenue for the iPhone (and Apple TV) on a subscription basis. The reason is that both the phone and media hub will receive a relatively steady amount of software features for free over their respective lifespans, meaning that the income from each sale in effect amortizes the software development costs after the product is released.
Analysts are also expecting Apple to have shipped 1.6 million Macs in the quarter.