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Earnings preview: No news is good news?

Dan Moren | April 22, 2014
Scientists might argue that the root cause of Earth's rotation is angular momentum, but come on: We all know it's money, plain and simple. We don't sit down every three months to hear Apple talk about physics, after all.

Scientists might argue that the root cause of Earth's rotation is angular momentum, but come on: We all know it's money, plain and simple. We don't sit down every three months to hear Apple talk about physics, after all.

On Wednesday, Apple CEO Tim Cook will take to the speakerphone to talk about the company's most recent financial quarter, cleverly dubbed "the second quarter of fiscal year 2014."

As always, Macworld will be on hand at 2 p.m. PT/5 p.m. ET with live coverage and analysis of the call. But if you just can't wait, and you want to prep a little, here are a few of the hot topics we expect to get covered during Apple's announcement and the ensuing melee of financial analyst questions.

The money

Let's start with the big ones: the financial figures. In his guidance for the second quarter, Apple CFO Peter Oppenheimer estimated the company would bring in revenue between $42 billion and $44 billion, with a gross margin of between 37 and 38 percent. That's compared to the revenue of $57.6 billion in revenue the company pulled down in the first quarter of this year, and the $43.6 billion it reported in the second quarter of 2013.

Assuming the company hits its results right smack dab in the middle, that suggests it might pull in profits of about $10.63 billion, according to my rough back-of-the-envelope calculations. That would be up over the $9.5 billion it profited in the year-ago quarter.

Analysts, meanwhile, are estimating average earnings per share of around $10.17 on revenues of $43.55 billion, as of this writing. That'll be down sequentially from the earnings per share of $14.50 in the first quarter, but up slightly over the $10.09 figure the company reported in last year's second quarter.

The company's pretty consistently given back a dividend of $3.05 per share over the last several quarters, so expect that trend to continue into this quarter.

The iPhone

Apple's flagship product had a pretty good quarter to kick off 2014, selling more than 51 million units. As always, expect that number to drop off more than a bit in the second quarter, with no holiday shopping season (or introduction of a new model) to bolster it. In the past, the drop-off has been anywhere from 7 percent to more than 20 percent; for no good reason, I'm ball-parking 12 percent and guessing Apple will sell somewhere in the vicinity of 45 million iPhones. But that's just between you and me.

If the rumor sites are any indication, iPhone 6 rumors are already starting to ramp up. But Cook and co. aren't likely to do anything to address them, no matter how prying the analysts get. Expect even oblique questions about whether Apple would ever consider making a larger-screen or cheaper phone to be met with the time-honored Tim Cook Stoney Silence (patent pending).

 

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