FBR's Dan Ives: Apple December Guidance Is The Key

• Apple Inc. AAPL shares have declined 11.61 percent over the last six months, from a high of $132.65 on April 27.
• Daniel H. Ives of FBR & Co. has maintained an Outperform rating on the company.
• With the company scheduled to report its F4Q15 results on Tuesday, Ives believes that all eyes would be on Apple’s December quarter guidance, especially iPhone sales in China heading into FY16.

Analyst Daniel Ives expects the company to report its F4Q15 revenue at $50.9 million and EPS at $1.89, with 49 million iPhone units.

According to the FBR report, “Apple has become a battleground stock given the confluence of China headwinds, worries about 6s growth prospects, and uninspiring June results,” especially concerns regarding an “iPhone 6 hangover.”

Related Link: What Some Of The Street's Top Apple Analysts Are Saying Before Earnings

While there have been conflicting reports regarding the demand for 6s in the supply chain, following the impressive opening weekend sales, Ives believes that the concerns have been overdone, given that Apple has ramped supply to meet the robust demand expected in FY16.

The primary focus for the December quarter guidance could be the China iPhone sales, given that this market continues to be a primary driver of the company’s growth.

“We believe Apple's growth story in China is still underappreciated by the Street, as the sustainability of iPhone growth in the region remains a debatable issue, especially due to recent macro developments and intense competition in the region,” Ives stated.

Ives believes that the iPhone momentum in China would continue to be robust in the coming quarters, along with increasing demand for the App Store and huge cross-sell opportunity for the remainder of the company’s ecosystem.