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Apple earnings preview: Look for surprisingly strong iPhone sales

Apple is expected to post revenue of $38.4 billion for third quarter, analysts predict
Third-quarter iPhone sales are expected to increase 14% compared with a year ago

Every year Apple suffers a slump in iPhone sales from April through June as customers await a new device -- but this year could be different.

A key thing analysts will be watching when Apple announces its third-quarter earnings Tuesday afternoon will be whether sales are strong despite the expected release of the iPhone 6 in September.

The tech giant may have found a way to avert its annual dip in iPhone sales by cutting deals with new carrier partners.

In April, the Cupertino, Calif.-based company told investors to expect revenue of $36 billion to $38 billion for the third quarter, but the consensus among analysts polled by Fortune magazine is that Apple's revenue could be as high as $38.4 billion, a year-to-year increase of 8.78%.

In the past year, Apple began selling the iPhone through 51 new carriers around the globe, including NTT DoCoMo in Japan and China Mobile, the largest carriers in their respective countries. In a note to clients, Gene Munster of Piper Jaffrey said he expects 14% growth in iPhone sales compared with a year ago, in the range of 35 million to 36 million units.

But Munster said the real news Tuesday will be in Apple's guidance for the next quarter. The numbers Apple gives for its fourth-quarter revenue will reveal whether the company will be able to launch the iPhone 6 before the end of September.

Apple is expected to introduce not one but two iPhones this year, each with larger screens than ever before. That increase in screen size is expected to boost sales of the popular device. Munster said Apple could launch the iPhone 6 on Sept. 19, giving the company a few days of sales during the fourth quarter. Those sales could add about $2 billion in revenue, Munster said.

Munster recommends owning Apple stock because even if the company's fourth-quarter guidance disappoints, "we believe investors would ultimately look past it and refocus on new products (larger screen iPhone, iWatch, iPads) in the fall."

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Copyright © 2014, Los Angeles Times
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