Thinking About Earnings Today

Posted by: Arik Hesseldahl on July 25, 2007

Apple will report quarterly earnings today after the close of the markets. All the attention during yesterday’s trading session was on the disclosure from AT&T that it had activated only 146,000 iPhones in the first 30 hours of the device’s availability. That slammed Apple stock, which closed down about $9 or so. Today’s it has recovered some of that territory. But there’s no way around it, today’s report will be all about the iPhone.

And its entirely possible that Apple may be forthcoming on iPhone sales data. After the iPod was first released in Oct. 2001, it wasn’t until the calendar third quarter — Apple’s fourth fiscal quarter of 2002 — that iPod sales figures began to show up in the company’s reported data.

Apple’s quarter closed on June 30, and so I have a hard time believing that two day’s worth of iPhone sales were sufficiently high as to be material to the quarter, and so Apple woulnd’t be obliged to disclose unit numbers. In short, I don’t think Apple will go beyond characterizing sales using vague language, like “blowing away our expectations.”

That said, Apple will have to say something to shoot down the disappointing numbers that came out of AT&T, that is if indeed that disclosure led many to believe incorrectly that unit sales were disappointingly low. Sales may indeed have been low, but then again 30 hours worth of activation data, especially in light of the widely reported activation delays, seems suspect to me. Meanwhile, as we’ve seen iPhone sales estimates have been all over the map. A note out from RBC today estimated sales at 350,000 to 450,000 in the first weekend. While another note from CIBC portrayed iPhone sales as having declined significantly based on its store checks. In response, it expects Apple to boost marketing efforts and to rush a 3G version of iPhone as soon as November of this year.

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