Analysts' estimates for Apple's Q3: revenues up 8.5% year over year, earnings up 18%
Spreadsheet of the day: Final estimates for Apple's fiscal Q3 — With the world's most valuable company — and the hedge funds' favorite — set to report earnings after the markets close today, the eyes of Wall Street are once again on Apple.
Context & Ripple Effects
Fortune's final-consensus sheet is a quarterly ritual by now — the previous installment collected Wall Street's numbers ahead of Apple's Q4 2013 report in October 2013. The pickup list this time — the Wall Street Journal, TechCrunch, Quartz, Computerworld, TUAW and others — shows how far a simple aggregate of analyst estimates travels when the subject is the world's most valuable company and, as Fortune puts it, the hedge funds' favorite stock.
What makes this particular preview more than arithmetic is the pipeline behind the print: suppliers were reportedly told to gear up for 70M–80M units of the next 4.7-inch and 5.5-inch iPhones by December 30, and Apple secured a comprehensive 'iTime' smartwatch patent the same day. Investors reading the June quarter are really pricing the fall product cycle.
First-order effects
- Apple cleared the bar Fortune tallied: the confirmed result is a record June-quarter revenue of $37.4 billion with EPS up 20%, beating the 8.5%-revenue/18%-earnings consensus and repricing what is described as hedge funds' favorite holding.
- Attention shifts immediately from the print to the September launch, with the confirmed 70M–80M initial production ask for the two larger-screen iPhones becoming the number that matters for the stock's forward case.
Second-order effects
- Component and assembly partners live off that build plan — a first-run order of that size for two new screen sizes forces capacity-allocation decisions across the supply chain heading into the December quarter.
- A 20% EPS print against raised expectations pressures the sell side to mark full-year models upward within days, resetting price targets before any new hardware ships.
Third-order effects
- If the pattern holds, Apple's quarterly report functions less as a backward-looking scorecard and more as the market's leading indicator for the next iPhone cycle, with supplier order volumes carrying more informational weight than the reported quarter itself.
- The persistence of the consensus-spreadsheet format points to a market structure in which pre-aggregated estimates effectively set the standard against which the world's most valuable company is judged every 90 days.
The trend: Apple's earnings report has hardened into a scheduled market event where the published consensus spreadsheet, not just the product roadmap, defines success or failure each quarter.