Apple earnings preview for Q3 2023

Tim Cook arrives at Sun Valley’s Allen & Company meeting in Sun Valley, Idaho.

David A. Grogan | CNBC

Apple is expected to post its third consecutive quarterly revenue decline when it reports earnings after the bell Thursday. Wall Street expects $81.7 billion in sales, which would be down about 2.3% from last year.

Apple’s stock is up over 51% so far in 2023, hitting all-time highs. Investors see it as a safe haven with strong cash flow, despite worries about slowing demand for consumer goods, including PCs and smartphones.

Analysts will also want to hear about how the current quarter, which ends in September, is shaking out. Apple hasn’t given guidance since 2020, citing uncertainty, but it provides investors with some data points that they can use to determine whether Apple sees overall sales growing or shrinking.

The company’s forecast will be more important. It may give clues as to whether global economies are set up for a “soft landing” after two years of interest rate hikes.

The June period is typically Apple’s slowest quarter of the year, while its fourth fiscal quarter often captures back-to-school laptop spending, a few days of new iPhone model sales — which usually come out in September — and shows Apple’s momentum heading into the holiday season.

“What will matter most will be management’s September quarter,” wrote Morgan Stanley analyst Erik Woodring in July, adding that he expects Apple to guide to year-over-year revenue growth again.

Emerging markets and China

Services growth and A.I. acceleration

Estimates

Apple reports its results by product line, which can give investors a look into which businesses are thriving and which ones are in a down cycle.

IPhone, iPad and Mac sales are all expected to be down on an annual basis, with iPad sales projected to drop nearly 11%, according to FactSet estimates. Wearables, the product category with headphones and Apple Watch — and what will likely be the reporting category for Vision Pro when it goes on sale — is projected to decline less than 1%.

However, analysts expect Apple’s services business to grow 5.2% on an annual basis, which would be a bright spot for the report.

Here’s what Wall Street is expecting, per FactSet estimates:

  • Revenue: $81.7 billion
  • EPS: $1.19 per share

Here’s what to expect from the company’s product lines, per FactSet estimates:

  • iPhone revenue: $40.2 billion
  • iPad revenue: $6.4 billion
  • Mac revenue: $6.3 billion
  • Other products: $8.3 billion
  • Services: $20.7 billion

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