Apple (AAPL) is set to report its Q2 2021 earnings after the closing bell on Wednesday. While analysts are calling for the tech giant to beat revenue expectations, Apple will face questions about how its business will be affected by the global chip shortage and increased COVID-19 vaccinations.
Here’s what Wall Street expects from the quarter versus how Apple performed in Q2 last year.
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Revenue: $77.3 billion expected versus $58.3 billion in Q2 2020
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Earnings per share: $0.99 expected versus $2.55 in Q2 2020
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iPhone revenue: $41.5 billion expected versus $28.9 billion in Q2 2020
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iPad revenue: $5.6 billion expected versus $4.3 billion in Q2 2020
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Mac revenue: $6.8 billion expected versus $5.3 billion in Q2 2020
Apple is still riding high on the sales of its iPhone 12, which it launched in September 2020. The first iPhone to offer 5G cellular connectivity, the iPhone 12 has been a massive success for the company so far. In Q1 2021, the company’s revenue was up 21% year-over-year powered by iPhone sales, and Q2 isn’t expected to be any different.
“We are expecting the iPhone 12 supercycle theme to be front and center on Wednesday after the bell when Cupertino delivers another strong upside March quarter based on our analysis,” Wedbush analyst Dan Ives wrote in a research note ahead of the earnings report.
But with vaccines rolling out to all Americans over 16, and states easing pandemic restrictions, the robust sales from Apple’s Mac and iPad segments could slow down, Goldman Sachs’ Rod Hall wrote in his own note.
“In our opinion, current high levels of both iPad and Mac demand are unlikely to be sustainable as the world re-opens, so another beat driven more by these areas may not be enough to drive the shares further,” Hall said.
Apple, like other tech companies, has benefited from stay-at-home orders that drove sales of its laptops, desktops, and iPad, as workers and students needed devices to stay connected.
Apple is also continuing to move forward with its plan to ditch Intel (INTC) as its primary chip provider in favor of its own Arm-based M1 chips. The company released its first MacBook Air, MacBook Pro, and Mac mini powered by M1 processors in November 2020, spurring growth in the segment, and earlier this month, Apple debuted its new M1-powered iMac and iPad Pros.
The biggest dark cloud hanging over Apple and other consumer tech companies is the ongoing global chip shortage, which could last into 2022.
The fear for Apple is that a lack of available semiconductors could slow the company’s ability to get products built and into consumers’ hands. So far, Apple has fared well, but a long-term slowdown in chip availability could ding its revenue going forward.
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