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Tuesday, July 31, 2018

Apple Earnings: What We're Watching


Apple (NASDAQ:AAPL) reports tonight. We expect a strong earnings report but the key metric may be iPhone units.

iPhone units accelerated on a one-year basis last quarter but actually slowed on a two-year basis.

iPhone being the most important driver to the overall business forces analysts to watch this key metric.

Here's the last few quarters iPhone unit data.

Fiscal 2017 2017 2017 2018 2018
Calendar 2017 2017 2017 2017 2018

Mar Jun Sept Dec Mar

Q2 Q3 Q4 Q1 Q2A
iPhone Units 50763 41026 46677 77316 52217
Growth -0.8% 1.6% 2.6% -1.2% 2.9%
2-year gr -17.2% -13.5% -2.7% 3.5% 2.0%

You see last quarter's pick up to 2.9% but adding up the last two year's growth rate the trend slowed from Q1. We look at the two year because you can catch an underlying trend that cancels out one-timers from a year ago.

Comparisons get tougher now also. June last year was up 1.6% versus March -.8%. So this year's June growth number gets a little tougher to come by when lapping higher year-ago numbers.

We'd expect a good guide because iPhone was late last year and hopefully won't be this year.

Net net we'd expect a good report but the key to watch is the iPhone unit trajectory.

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