Apple expects best ever holiday quarter, estimates $84B to $87B in revenue

Apple is predicting that for the first quarter of its 2018 fiscal year, ending in December it will make more money than it ever has before, expecting revenue between $84 billion and $87 billion mostly on the strength of the iPhone X.

In its quarterly earnings report, Apple is required to make predictions about the next quarter, and what it has predicted blows the top off of Apple's earnings in the past. Besides the record-breaking revenue estimates, Apple is expecting between a gross margin of between 38 percent and 38.5 percent, operating expenses between $7.65 billion and $7.75 billion, and a tax rate of 25.5 percent.

For comparison, in the first fiscal quarter of 2017, Apple generated $78.4 billion in revenue.

In the first fiscal quarter of 2016 spanning the calendar year 2015 holiday quarter following the iPhone 6s release, Apple generated $75.9 billion. Apple cranked out $74.6 billion in the previous year that saw the large-screen iPhone 6 family launch.

Specific segments, such as Services revenue is not estimated in the earnings prediction. Also not stated are expected sales figures for the iPhone, iPad, Mac, or any other Apple-produced product.

Apple CEO Tim Cook predicted that the forthcoming holiday period will be the "best quarter ever" during the conference call surrounding the results.

In Apple's latest quarterly results, the company saw year-over-year growth in every hardware segment. Earnings per diluted share was $2.07, up 24 percent, and international sales accounted for 62 percent of the quarter's revenue.

10 Comments

melgross 33607 comments · 20 Years

About 7 years ago

I imagine that the large spread is due to the uncertainty in the number of iPhone Xs that will be available.

i also remember that just a couple years ago they stopped giving spreads because they said that they would work out the best estimate, and just give that. Something in their thinking about that must have changed.

jd_in_sb 1599 comments · 14 Years

I can already hear the complaints from first quarter 2019 that might not be able to match the performance of the launch of iPhone X. At least that’s what happened the year after the blockbuster iPhone 6 debuted: a big hangover.

fallenjt 4056 comments · 13 Years

jd_in_sb said:

I can already hear the complaints from first quarter 2019 that might not be able to match the performance of the launch of iPhone X. At least that’s what happened the year after the blockbuster iPhone 6 debuted: a big hangover.

Wrong. It'll be different. Why? Because first quarter 2019 will account for the sales of non-X iPhone with Face ID, assume the name is iPhone 9/9+. So, the line up in 3rd quarter 2018 will be refreshed iPhone X (iPhone Xs, assumed), iPhone 9/9+ all with Face ID and also price-dropped iPhone X.

socalbrian 25 comments · 10 Years

melgross said:

I imagine that the large spread is due to the uncertainty in the number of iPhone Xs that will be available.

i also remember that just a couple years ago they stopped giving spreads because they said that they would work out the best estimate, and just give that. Something in their thinking about that must have changed.

1) 4% is not a large spread at all
2) They have always given spreads, for 4Q17 (just reported) their guidance had been $49 billion to $52 billion

http://marketrealist.com/2017/10/will-apple-beat-analyst-estimates-in-fiscal-4q17/

carnegie 1082 comments · 10 Years

melgross said:

I imagine that the large spread is due to the uncertainty in the number of iPhone Xs that will be available.

i also remember that just a couple years ago they stopped giving spreads because they said that they would work out the best estimate, and just give that. Something in their thinking about that must have changed.

Apple actually went the other direction with its guidance. Up until Q1 FY 2013 it provided single point guidance for revenue. In that quarter (for the next quarter) it started providing a guidance range for revenue. It also stopped providing EPS guidance and started providing, in addition to guidance for revenue, guidance for gross margin, operating expenses, other income, and tax rate.