FORTUNE -- For Fortune's 20th consecutive Apple (AAPL) Earnings Smackdown, we've started to collect estimates for fiscal Q4 2013 from our roster of professional and amateur analysts. The actual results are coming later than usual this year; Apple's fiscal 2013 ended on Saturday Sept. 28., and the results won't be known until Monday Oct. 28.
In the numbers we've seen so far, the conservative pros and the more bullish amateurs are in closer alignment than in the past. Their biggest disagreement is over Apple's gross margin, a measure of the efficiency with which the company turns sales into profits.
The average GM estimate among the professionals is 36.8% -- the high end, per Apple's latest SEC advisory, of the 34-37% guidance the company offered in July.
The average among the amateurs is 37.4% -- above the top of Apple's range.
The attached chart comes from Wells Fargo's Maynard Um, who addressed the gross margin question Tuesday and offered some bullish forecasts for the next two quarters:
iPhone launch quarters typically have accounting headwinds that ease in "s" cycles; historically, "s" versions drive better gross margins. Historically, the quarter of an iPhone launch has seen accounting gross margin headwinds (which, in our opinion, makes Apple's September quarter gross margins more impressive). If our accounting reversal assumptions are correct and assuming 5s/c mix goes to two-thirds of iPhone volumes, we believe December corporate gross margins could be 39.6% (versus our 38.3% estimate)--or $0.56 in incremental EPS--without calculating any potential incremental benefits from deferred margin on component sale or warranty accruals.
The March quarter could see even greater upside potential as warranty accruals have typically seen material decreases per unit in the third quarter following an "s" version launch, which could lead to the March quarter corporate gross margin hitting 40% (versus our 38.5% estimate)--a level not seen since September 2012. While the reversals of these can vary, if we just take a holistic step back, we note that gross margins have gone up by an average of 225bps in the two quarters of launch in an "s" cycle versus the two quarters of launch in a new form factor iPhone where gross margins have decreased by an average of 225bps. Gross margin improvements, particularly if they get to 40%+ would, in our opinion, dispel high-end smartphone commoditization fears.
A round-up of the analysts' revenue and earnings forecasts for Apple's June quarter.
FORTUNE -- When it comes to quarterly earnings reports, Microsoft (MSFT) and Google (GOOG) can be tough acts to follow.
Not this quarter.
Wounded each in their own way by the shift from desktop to mobile computing, both companies reported disappointing earnings Thursday, and their shares fell sharply in after-hours trading -- Google by $37.81 (-4.15%) and Microsoft by $2.23 (-6.29%).
Apple (AAPL) MOREPhilip Elmer-DeWitt - Jul 19, 2013 5:50 AM ET
In one day, Apple's profit margin went from the high end of its range to the low end.
FORTUNE -- After Apple's (AAPL) quarterly report last week nearly every analyst we heard from pointed out that the company's 37.5% gross margin -- the measure of how efficiently a company turns sales into profits -- was at very bottom of its 37.5%-to-38.5% forecast range.
The analysts offered a variety explanations, but most attributed the reduced margins to MOREPhilip Elmer-DeWitt - May 2, 2013 12:03 PM ET
The expectations of institutions that sell and those that buy are two different things.
FORTUNE -- In a note to clients issued Monday afternoon, 24 hours before Apple (AAPL) is scheduled to release its earnings for the March quarter, Piper Jaffray's Gene Munster talked about something we don't hear much about: The so-called buy side.
Buy side is Wall Street jargon for those investing institutions such as mutual funds, pension funds and insurance MOREPhilip Elmer-DeWitt - Apr 22, 2013 7:17 PM ET
The focus next Tuesday will be on how efficiently Apple turned revenues into earnings.
FORTUNE -- Apple's (AAPL) shares have been getting slammed as Wall Street frets about its March quarter earnings report, due out next Tuesday.
Whether the stock bounces from the 16-month low it hit Wednesday or sinks even lower may depend less on iPhone or iPad sales than on its guidance for the June quarter (more on that later) MOREPhilip Elmer-DeWitt - Apr 18, 2013 8:23 AM ET
Piper Jaffray's Gene Munster says growth may not return until the back half of 2013
FORTUNE -- In February, Gene Munster predicted that Apple (AAPL) would get a boost this quarter from product announcements in March or April.
With March almost over and the quarter ending on Saturday, Piper Jaffray's senior Apple analyst issued a note to clients Tuesday warning that the company will have to get through a dry patch before MOREPhilip Elmer-DeWitt - Mar 26, 2013 6:43 AM ET
Morgan Stanley finds evidence that Apple's margins will improve before the end of 2013
FORTUNE -- Apple's (AAPL) quarterly gross margin -- the measure of how efficiently a company turns sales into profits -- peaked in March 2012 at an astonishing 47.4%, along with its quarterly stock performance (up 29%).
But what goes up must come down, and when Apple warned Wall Street that its margins were likely to fall -- to MOREPhilip Elmer-DeWitt - Feb 4, 2013 6:48 AM ET
Stuff that went right over most analysts' -- and nearly every reporter's -- head
FORTUNE -- As predicted, the headlines reporting Apple's (AAPL) quarterly earnings last week -- and the market's immediate and violent negative reaction -- failed to take into account that Q1 2013 had one less week Q1 2012. Even Tim Cook did lousy job explaining it.
It fell to the Braeburn Group's Robert Paul Leitao, an independent investor who MOREPhilip Elmer-DeWitt - Jan 28, 2013 3:33 AM ET
Ranking the best and worst Apple analysts for fiscal Q1 2013
FORTUNE (Koh Ngai, Thailand) -- As evidenced by Apple's (AAPL) sickening $55.5 (10.8%) drop in after-hour trading Wednesday, the analysts who cover the company -- both on and off Wall Street -- aren't doing it any favors.
The company didn't have a bad quarter. In fact, it posted its best quarter ever with earnings per share of $13.81 on sales of MOREPhilip Elmer-DeWitt - Jan 23, 2013 8:16 PM ET
It's a piece of cake, he says. Just take the company's revenue guidance and add 15%
In a 5,000-word essay posted in Bullish Cross Monday, Andy Zaky laid out his method for estimating Apple's (AAPL) quarterly revenue and earnings numbers. He starts with three assumptions:
That most Wall Street analysts and financial writers are completely clueless and couldn't analyze their way out of a paper bag
That the earnings guidance numbers Apple issues each quarter MORE
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