Expectations could hardly be lower for Apple’s earnings today

Apple is scheduled to report its second-quarter results today after the market closes. Join Recode for live coverage beginning at 4:30 pm ET, 1:30 pm PT.

Expectations are — let’s say — muted. There seems to be growing pessimism about how well Apple’s flagship iPhone X is selling, and questions about a potential rebound in China. And why does it seem like so many new Apple projects, like the HomePod speaker, end up delayed?

• For the record, Wall Street expects Apple to report $61 billion in March-quarter revenue, representing about 15 percent year-over-year growth ...
• ... on iPhone shipments of around 53 million.
• Apple should forecast June-quarter revenue between $48 billion and $51 billion, predicts longtime Apple stock analyst Gene Munster — now an investor at Loup Ventures. That’s below Wall Street’s current consensus of $52 billion in revenue for the quarter.

But the interesting thing is that in the eyes of many investors, Apple’s quarterly iPhone sales numbers seem to matter less now than they have for years — at least relative to how much cash Apple is generating and returning to shareholders through dividends and stock buybacks.

“Apple has found a narrative revolving around capital allocation,” analyst Neil Cybart, whose well-regarded Above Avalon newsletter focuses on Apple, wrote last month. “Instead of iPhone sales or Apple Services revenue gaining importance, Apple’s balance sheet strategy is driving the company’s new Wall Street narrative.”

So keep your ears open for commentary on iPhone sell-through during the company’s earnings call — but also for shareholder-friendly changes to Apple’s capital return program.

This article originally appeared on Recode.net.

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