by , 7:00 AM EDT, July 18th, 2000
Apple will reveal last quarter's financial results today after the stock market closes. Most analysts believe Apple will meet the expected $0.44 per share earnings for their fiscal 3rd quarter, while a few, according to WhisperNumber.com, predict Apple will beat forecasts by two cents for $0.46 per share.
Since Apple returned to profitability at the beginning of 1998 the company has never failed to deliver a positive surprise in its quarterly earnings report. This quarter shouldn't prove the exception. However, there is some concern that slipping iMac sales may adversely effect earnings. Revenue expectations were lowered in May by several analysts from $2 billion to $1.9 billion.
Higher gross margins are expected to have an ameliorating effect on the lower iMac unit shipments. Apple's gross margin at about 28% is already head and shoulders above the industry average which is close to 21%.
According to Eric Yang of appleinvestors.com:
"On the earnings front, if Apple meets consensus estimate of $0.44 per share, it will have achieved year on year EPS growth of 27%. As impressive as that might sound, this figure still doesn't do justice to Apple's real earnings growth rate. As I pointed out in an earlier article on valuation of Apple stock, Apple's tax rate has been on the rise. The higher tax rate distorts year on year comparisons and makes growth rate appear weaker. After factoring out this artifact, we can see year on year earnings growth for Q3 will be about 49%."
You can listen in on the live QuickTime broadcast of Apple's conference call this afternoon at 2 PM PST where the details of Q3 earnings results will be discussed by Fred Anderson, Apple's chief financial officer, and others with financial analysts. Th