Switch To A Mac: Apple earnings preview

Apple Inc. will report fiscal fourth quarter (Q4) 2007 sales at the close of the US stock market. The earnings report will provide details for the company's performance during the months of July, August, and September 2007 but more importantly, will provide details for Apple's 2007 fiscal year. Analysts polled by Thomson Financial expect the Apple to report earnings of 85 cents per share on sales of $6.05 billion. In the year ago quarter, Apple recorded a profit of 62 cents a share on $4.84 billion in revenue.

Mac Sales
We are eagerly looking to analyze the number of Macintosh (Mac) computers the company sold in Q4 2007 and during the 2007 fiscal year for additional insight into Switchers and continued Mac popularity/momentum. Key events in the quarter specific to the Mac included the important back-to-school buying season and the release of new iMac and Mac mini models. Missing however were updates to the Mac Pro desktop, and the MacBook and MacBook Pro notebook lines.

Over the past several weeks numerous Wall Street Analysts and Investment Firms have released projections for the number of Macs sold during the quarter. The predictions vary but hover somewhere in the range of 2 million Macs. In the year ago quarter Apple sold a total of 1.61 million Macs. Full year fiscal 2006 Mac sales were 5.303 million.

Mac sales for the first three quarters of 2007
For the first three quarters (Q1, Q2, Q3) of 2007, Apple has reported sales of 4.887 milion Macs which can be broken down as follows:

Portables sales: 2,990,000 = 61.2% of total
Desktop sales: 1,897,000 = 38.8% of total

In October 2006, we predicted that Apple would sell between 6.6 and 6.8 million Macs during fiscal 2007. This prediction was made before knowing 2006 fourth quarter and 2006 fiscal year totals for Macs sales.

iPhone
The report will include the first full quarter of iPhone sales data. We predict a total of 1.237 million units.

Moving Forward
The company will also provide guidance for 2008 fiscal first quarter (Q1 2008) that runs from October 2007 to the end of December 2007.

Check back later for our reports and analysis of both the earnings and conference call.