The Apple Earnings 'Cheat Sheet'

In a report published Monday, analysts at RBC Capital Markets maintained their Outperform rating on

with a price target of $142. The analysts expect the company to report its March quarter results with gross margin upside. The analysts believe that Apple is likely to benefit from several catalysts in the near term. In addition, with iPhone demand remaining strong through the March quarter, the company is likely to report its results at the high-end of its guidance range. "Furthermore, gross-margins could surprise on the upside due to multiple factors: (1) yield efficiency, (2) supply chain pricing, (3) Apple watch ramps (June-qtr benefit), (4) mix shift favoring iPhone 6+ (emerging market) and (5) ASP benefits as AAPL raises iPhone pricing," the analysts said. Related Link:

With regard to the Apple Watch, there already are pre-orders of more than two million units, with June quarter expectations of more than three million. The analysts also expect iPhone sales in China to boost results. "Overall, we believe revenues will be above the high-end of Apple's guided range $52–55B due to iPhone sales and strength in China. In addition, gross margins will continue to benefit from a heavier iPhone mix and we would not be surprised to see the margin profile exceed 39.5%," the analysts added. According to RBC Capital Markets, "Beyond the guidance (June quarter), which we think should benefit from solid Apple Watch sales, the focus will be on changes in capital allocation. Overall, we would not be surprised to see a ~$50B+ annual increase in the program through a mix of stock buybacks and an increased dividend."