Apple to report second quarter earnings on Wednesday

As unemployment continues to rise and discretionary income contracts, Apple will undoubtedly struggle to keep up its explosive growth in 2009. The current consensus estimates for 2009 have Apple earning $5.15 in EPS on revenue of $35.14 billion. While the current research data is less than favorable, the consensus is still overly pessimistic on the current period.

However, given the relatively high lack of transparency with regard to iPhone and Macintosh sales going forward, Bullish Cross holds an increasingly cautious view with regard to Apple’s fundamentals and earnings estimates in 2009. Bullish Cross now expect Apple to earn about $5.78 in EPS on $36.591 billion in revenue down from $6.63 in EPS on $41.196 billion in revenue. This reduction in estimates is due in large part to Apple intentionally making it more difficult if not impossible to track iPhone sales using IMEI data. However, if the third generation iPhone is well received by the consumer this summer or if the economic climate becomes substantially more improved in the latter half of 2009, there is ample room for Apple to handedly beat these estimates.

For fiscal Q2 2009, Bullish Cross expects Apple to earn about $1.19 in EPS on $8.318 billion in revenue on a GAAP basis versus the consensus of $1.09 in EPS on $7.94 billion in revenue. The consensus estimates for Q2 are far more fairly stated than they’ve been in previous quarters. On a non-GAAP basis, Bullish Cross expects Apple to earn $1.59 in EPS on $8.798 billion in revenue. One can interpret the recent research data as indicating that Apple could sell about 10.5 million iPods, 2.45 million Macs and about 3 million iPhones. The Mac assumption could prove optimistic.

Andy Zaky’s Earnings Estimates for Q2 2009 (in Millions, except for per share data)

Revenue Breakdown by Product Summary for Q2 2009

Andy Zaky’s GAAP-Based Earnings Estimates for FY 2009 (in Millions)