Apple (AAPL) on Tuesday is forecast to report its second consecutive year-over-year drop in iPhone unit sales when it releases June quarter financial results.
The Cupertino, Calif.-based company reported its first-ever decline in iPhone sales on a year-over-year basis when it announced March quarter results last April. Apple will post its fiscal third-quarter earnings after the market close Tuesday.
In a report Thursday, Deutsche Bank analyst Sherri Scribner said she thinks Apple sold 41 million iPhones in fiscal Q3, a 14% decline from the same quarter last year. That's at the low end of investor expectations, which are in the range of 41 million to 43 million units, she said.
"Our checks suggest iPhone SE sales were stronger than expected, which will likely pressure iPhone (revenue) and profitability," Scribner said. "We continue to expect iPhone growth to be challenged in calendar 2016, and are modeling iPhone units to decline 10% year over year."
She reiterated her hold rating on Apple stock with a price target of 105. Apple fell 0.8% to 98.66 on Friday.
IBD'S TAKE: Apple stock has an IBD Relative Strength Rating of 17, meaning it has been outperformed by 83% of stocks on the market during the last 12 months. For the past week, it has found a ceiling at 100. For more information on Apple, visit the IBD Stock Checkup.
Analysts polled by Thomson Reuters expect Apple to earn $1.38 a share on sales of $42.11 billion for the June quarter. That would translate to year-over-year declines of 25% and 15%, respectively.
For the September quarter, Wall Street is modeling Apple to earn $1.60 a share, down 18%, on sales of $45.84 billion, down 11%.
Morgan Stanley analyst Katy Huberty predicts that Apple's June quarter will mark a trough in iPhone sales. She expects unit sales to pick up with the iPhone 7 and 8 cycles. The iPhone 7 is rumored to be released in September.
"We expect Apple to report in-line June quarter results, and guide September quarter slightly below consensus estimates," she said in a report Thursday. "We like the set-up as iPhone growth likely troughed in June and we expect a more revolutionary iPhone cycle next year."
She rates Apple stock as overweight with a price target of 120.
RELATED:
Apple Car Rollout Delayed Two Years, Media Report Says
Apple Watch Shipments Dive 55% As Device Passes 1-Year Anniversary
Apple Receives Another Price-Target Cut Ahead Of Q3 Earnings
