Apple reports financial results for the September quarter after the close of trading on Thursday, and all eyes will be on the progress of the company’s recently launched iPhone 15 smartphones. What the Street most wants from Apple is a reason for optimism that it can meaningfully break out of its recent malaise. Analysts expect revenues to decline from the year-ago level for a fourth straight quarter.
While Apple shares have appreciated 30% this year, the stock is off 13% since it reported June quarter results, amid worries about the lack of growth and mixed reports on demand for the iPhone 15. If the stock declines appreciably on the earnings report, Apple could be dethroned from its position as the market’s largest company by market cap by Microsoft (MSFT), which is up 40% this year, driven by investor enthusiasm for its AI software push.
Jefferies analyst Andrew Uerkwitz says he will be looking for comments from Apple on China market share and product replacement cycles. “Our fear is we could slowly return to replacement cycles similar to pre-COVID or even longer as consumers underappreciate faster chip speeds, battery life, and display quality as current products are ‘good enough’,” he writes. headtopics.com
On the company’s last earnings call, CFO Luca Maestri said that September quarter revenue would show a decline comparable to the 1% dip in the June quarter. He also said that iPhone and Services revenue would accelerate from the June quarter, but that both Mac and iPad sales would be down double-digits from the year ago-quarter. Maestri projected gross margin in the quarter of 44% to 45%.
For the wearables, home and accessories category, estimates call for revenue of $9.5 billion, down 1.9%. Services revenue is projected to be $21.4 billion, up 11.4%, rebounding from four straight quarters of single digit growth. headtopics.com
For the December quarter, consensus estimates project revenue of $123.1 billion, up 5%, with profits of $2.09 a share. That includes an expected 6% year-over-year improvement in iPhone revenue to nearly $70 million, with the services category projected to grow 10% to nearly $23 billion.
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