Focus on iPhone 14 sales

apple It will announce fourth-quarter earnings for the quarter ending in September after the bell on Thursday.

The most important new information will be any details the tech giant provides about how the iPhone 14 series will be sold.

Many investors will be watching to see if Apple’s newest iPhones, which went on sale late in the quarter, are in full swing for a growth cycle or whether global macroeconomic conditions are finally starting to affect the high-end electronics market.

“We don’t think fundamentals are immune to the macro background, but we see a combination of a flexible iPhone product cycle in terms of revenue rather than volume, as well as margins, to deliver results that show resilience above minimum investor expectations at this time,” JPMorgan’s Samik Chatterjee wrote in a note on Monday. Monday.

Apple could also see a boost from better-than-expected sales of the iPad and Mac, which have been slowed by a lack of parts in recent quarters. Apple said in July That supply shortage could hurt the company’s sales by $4 billion, but some analysts believe the company will say it was better able to manage the supply chain this quarter.

Apple has not provided official guidance since 2020, initially citing uncertainty caused by the pandemic. But management provided individual data points each quarter that allow analysts to return to sales forecasting.

Here’s what Wall Street expects, according to FactSet estimates:

  • he won: 88.79 billion dollars
  • EPS: $1.27

In July, Apple’s chief financial officer, Luca Maestri, said revenue growth in the September quarter would be greater than the 2% annual growth in the third quarter.

Maestri also warned investors that while the high-margin services business will continue to expand, its growth rate will slow from 12% during the June quarter, citing the strength of the dollar and economic factors.

However, “most investors agree that services revenue growth should accelerate” during the December quarter again, according to Eric Woodring of Morgan Stanley.

Investors will be watching closely what Apple says about this quarter. Any forecast or guidance pointing to a lighter-than-expected holiday season could represent the biggest risk to stocks.

“We don’t expect AAPL to provide revenue guidance for Formula 1Q (December) due to the ongoing overall uncertainty, but we believe the company will suggest revenue growth will slow,” Deutsche Bank’s Stanley Hu wrote in a note over the weekend.

However, Apple’s sales appear to have remained strong, according to an analysis of iPhone wait times and third-party estimates of the premium smartphone market.

“The guidance suspension is likely to feature easier supply, improved growth in services and less headwinds in the FX market, but it is unlikely that you will get specific guidance for growth given the overall uncertainty,” Chatterjee wrote in a note.

One product category that could be affected by slowing demand is the company’s wearables division, which includes Apple Watch sales and wireless earphone sales.

“We believe that wearables are the most discretionary product in Apple’s portfolio, and therefore the most vulnerable to the decline we’re seeing in consumer electronics spending,” Morgan Stanley’s Woodring said in a note.

Apple’s first fiscal quarter runs from October through the end of December, and is the company’s largest quarter, buoyed by increased holiday spending and a launch schedule that brings new products to market in the fall.

Ultimately, analysts will want to know on Thursday how Apple can weather a coming storm that could hurt discretionary spending and whether stocks will remain a safe haven as investors re-evaluate other tech names.

Apple still has incredibly strong free cash flow and spends tens of billions annually on stock buybacks and dividends. The stock is down 16% year-to-date, while the Nasdaq Composite is down more than 30%.

“We still look at AAPL as a strong defensive name [free cash flow] Coin analyst Krish Sankar wrote in a note:

CNBC’s Michael Bloom contributed to this report.

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