Wall Street expects Apple (AAPL) to post its best sales and earnings growth in over a year when it reports fiscal second-quarter results after the market close on Tuesday, even though iPhone sales could be slowing ahead of the launch of the company’s 11th-generation smartphone.
Analysts are forecasting Apple to earn $2.02 a share, up 6% year over year, on sales of $52.97 billion, up 5%, in the March quarter. That would be its best earnings growth in five quarters and best sales growth in six quarters.
For the June quarter, analysts expect Apple to earn $1.62 a share, up 14%, on sales of $45.57 billion, up 8%.
Wall Street is predicting quiet quarterly results from Apple before the rumored September launch of the company’s highly anticipated iPhone 8.
Many investors will be more focused on the company’s cash return plan than on near-term sales and earnings growth. Apple updates its capital return program every spring with its second-quarter results. Analysts expect the iPhone maker to raise its cash dividend and share buybacks.
Apple shares were up a fraction, near 144.80, in premarket trading on the stock market today. The stock is just below its all-time high of 145.46, reached on April 5.
“Apple is currently in the seasonal doldrums for the iPhone as the March and June quarters have historically been the seasonally weakest quarters of the year,” Drexel Hamilton analyst Brian White said in a report Monday. “However, we believe investors will continue to support the stock ahead of the iPhone 8 cycle that is expected to begin this fall.”
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White rates Apple stock as buy with a price target of 185.
Apple’s fiscal second-quarter report is unlikely to be a meaningful catalyst for the stock, Pacific Crest Securities analyst Andy Hargreaves said in a report.
Critical questions will remain unanswered related to profit growth in the iPhone 8 cycle and for possible repatriation of foreign cash, he said.
Hargreaves rates Apple stock as overweight with a price target of 150.
RBC Capital Markets analyst Amit Daryanani expects in-line results for Apple’s March quarter and sees some downside to June-quarter expectations.
He rates Apple stock as outperform with a price target of 157.
“While investors clearly and rightfully remain focused on second-half 2017 dynamics we think there could be several levers to monitor this quarter,” he said.
They include increased dividends and stock buybacks, gross margin pressure in the face of rising Nand chip prices, iPhone inventory ahead of the fall product refresh, and continued services growth.
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