Apple to focus on finance amid questions about Jobs

Apple will announce its first-quarter earnings Tuesday afternoon. But whatever news the company reports on its performance during the holiday shopping season—and analysts are expecting another strong quarter—it’s sure to be overshadowed by the news that came out of Apple on Monday.

That was when Steve Jobs revealed, via a memo to Apple employees, that he would take a leave of absence from his day-to-day CEO duties to focus on his health. It’s the second health-related sabbatical since 2009 for Jobs, who has battled pancreatic cancer and received a liver transplant.

Analysts on Apple’s Tuesday afternoon conference will likely pepper company executives with questions about Jobs’s leave of absence, as they try to get more details on Monday’s news. And Apple executives figure to be just as circumspect in what information they provide.

Follow Macworld’s live coverage of Tuesday’s first-quarter earnings conference call

It’s possible that Tuesday’s conference call could fill in some details about Jobs’s leave of absence. When he stepped back from his CEO duties two years ago, Jobs specified a six-month leave (returning in June 2009, as promised). Monday’s announcement to Apple employees included no return date, an omission analysts are sure to ask about during the question-and-answer portion of Tuesday’s conference call.

But if history is any indication, Apple executives are likely to respect Jobs’s request for privacy. In past conference calls—including those during Jobs’s last medical leave—the company has declined to answer questions about his health, calling it a private matter.

While Jobs’s condition figures to be on the minds of analysts during Tuesday’s call, Apple will try to keep the focus on its performance for the company’s fiscal first quarter. That three-month period covers the holiday shopping season—an important time for Apple’s business given the company’s growing focus on consumer electronics.

Analysts are looking for the company to announce earnings of $5.38 a share on revenue of $24.38 billion, according to figures compiled on Yahoo’s finance site. That would outpace the guidance Apple chief financial officer Peter Oppenheimer during Apple’s last analyst briefing. Apple told analysts to expect revenue of $23 billion and earnings per share of $4.80, though the company’s forecasts are notoriously conservative.

Topping last year’s performance for the fiscal first quarter would certainly be an impressive feat. For the three-month period ended December 29, 2009, the company tallied sales of $15.68 billion and a net quarterly profit of $3.38 billion—both records at the time. Year-ago earnings per share were $3.67.

As with the 2010 fiscal fourth quarter, much of the spotlight for the 2011 first quarter numbers will fall on the iPad. Apple sold 4.19 million iPads during its fourth-quarter—the first full quarter of sales for the tablet—and analysts will be eager to see how that momentum carried over into the holiday shopping season, particularly with Apple expanding its iPad retail efforts to Verizon, AT&T, Target, and Walmart.

iPods will be a source of fascination, too, on Tuesday, but for entirely different reasons. Apple’s music player line, which still dominates the MP3 market, no longer enjoys the skyrocketing growth of half-a-decade ago; in fact, year-over-year sales growth has declined in recent quarters. Still, the holiday season is the biggest quarter for iPod sales, as consumers snatch up the devices for gifts and stocking stuffers.

In the year-ago holiday quarter, Apple sold 21 million iPods (which was still a decline of 8 percent from the 2009 fiscal first quarter). It will be interesting to see what impact the September refreshes of the nano, shuffle, and touch models will have on the iPod’s sales momentum. Apple will likely focus its attention on the iPod touch, a model that’s still enjoying strong sales while helping to drive up the average sales price of the company’s MP3 offerings.

iPhone sales have helped fuel Apple’s performance in recent quarters, a trend that is likely to continue with Apple’s first-quarter numbers. During the fiscal fourth quarter, for instance, iPhone sales jumped 91 percent year-over-year to 14.1 million phones. Analysts will want to see if holiday sales helped Apple improve upon the 8.7 million phones it sold over the same period last year.

Last week’s announcement of an iPhone capable of running on Verizon’s network will likely inspire questions about what the end of Apple’s exclusive arrangement with AT&T will mean for U.S. smartphone sales. Analysts may also pick up on the news that Apple’s arrangement with Verizon is not exclusive and ask whether a Sprint press event scheduled for next month could mark the arrival of another CDMA-based iPhone. Given Apple’s reluctance to talk about future products, executives will probably not be forthcoming about any iPhone prognostications.

As for Apple’s still-thriving Mac business, analysts will look to see if the company beat last year’s first quarter sales mark of 3.36 million Macs—a record at the time, but one that Apple later passed with the 3.89 million computers it sold during 2010’s fourth quarter.

The Mac App Store didn’t debut during the fiscal fourth quarter—it only opened its doors in January. But Apple executives may give some details about the store’s performance so far. The company has already disclosed that the Mac App Store passed the 1 million download mark just 24 hours after its January 6 opening.

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