Apple 4Q18 Earnings Expectation Meters

Apple will report another good earnings report on Thursday. Revenue guidance for 1Q19 will be one for the record books as Apple will guide to its best quarter ever. However, when diving down deeper into Apple’s 4Q18 results, things may look a bit messier. The fourth quarter was one of transition for Apple as the company launched new iPhones and Apple Watches. It would not be surprising if demand for a number of product categories waned heading into September. However, stronger iPhone and Apple Watch ASP trends will more than offset unit sales weakness.


The following table contains my Apple 4Q18 estimates.

The methodology and data behind my estimates are found in my full 3,600-word Apple 4Q18 earnings preview available here exclusively for Above Avalon members. (To become a member and access my full earnings preview, visit the membership page.)

Each quarter, I publish expectation meters ahead of Apple's earnings release. Expectation meters turn single-point financial estimates into more useful ranges that aid in judging Apple's quarterly performance. In each expectation meter, the white shaded area reflects my single-point estimate. The gray shaded area represents my broader expectation range. A result that falls within this gray range signifies that the product or variable being measured is pretty much performing as expected. A result that falls in the green shaded area denotes strong performance and the possibility of me needing to increase my estimates going forward. Vice versa, a result falling in the red shaded area has the opposite effect, potentially leading me to reduce my assumptions going forward. 

As with last quarter, I am publishing three expectations meters for Apple's 4Q18:

  1. iPhone unit sales

  2. "Other Products" revenue

  3. 1Q19 revenue guidance


My expectation is for Apple to report iPhone unit sales between 44M and 48M units. A result north of 48M units would be considered strong while a sub-44M result would be considered weak.

Other Products

Apple's "Other Products" category is a catch basin for the following products: Apple Watch, AirPods, HomePod, Apple TV, Beats headphones, iPod touch, and Apple-branded and third-party accessories. The closer 4Q18 "Other Products" revenue is to $5B, the more likely it is that Apple Watch and AirPods results were strong. A result closer to $4 billion of revenue would reflect some Watch demand being pushed into 1Q19 due to customers waiting for Apple Watch Series 4.


Apple’s 1Q19 revenue guidance has a good shot at exceeding Wall Street’s expectations. My $98B to $100B revenue guidance estimate is $5B to $7B higher than consensus. The discrepancy is likely explained by different estimates regarding iPhone unit sales mix and its impact on iPhone ASP.

My full 4Q18 earnings preview contains three parts:

  1. Setting the Stage

  2. iPhone, iPad, Mac, Apple Watch, and Services Estimates

  3. 1Q19 Guidance, Updated Apple Earnings Model, Final Thoughts

To read my full preview and receive my Apple earnings review later this week, sign up at the membership page