Apple could release a weak report on Thursday but investors might celebrate anyway
Shortages of the iPhone 14 Pro series surfaced during the start of the holiday shopping season
Apple warned consumers about the iPhone 14 Pro shortages early in November
UBS analyst David Vogt wrote in a note to clients earlier this month, “We believe the peak impact of the disruptions was felt in early to mid-November as wait times hit an extreme level (link) as the wait time in the US for the 14 Pro and 14 Pro Max reached 34 days while wait time in China at the high-end hit 36 days.” So what will all this mean for Apple and its investors?
What the Wall Street consensus is expecting Apple to report on Thursday
While the issue at Foxconn’s Zhengzhou facility impacted mostly Apple, some of the revenue decline is due to an overall weak environment for tech products in general. Shipments of smartphones declined 18% during the calendar fourth quarter (which is the same period as Apple’s fiscal first quarter of 2023) which was the worst quarter turned in by the smartphone industry ever. And Apple also had to deal with a poor quarter for PC sales as shipments of those devices declined 28% during the calendar fourth quarter according to IDC.
For Apple’s fiscal first quarter 2023, the Wall Street consensus (via Refinitiv’s survey of analysts) is as follows:
- Revenue: $121.19 billion.
- Earnings per share: $1.94 per share.
- iPhone revenue: $68.29 billion
- iPad revenue: $7.76 billion
- Mac revenue: $9.63 billion
- Other products revenue: $15.26 billion
- Services revenue: $20.67 billion
For the current fiscal second quarter which ends in March, analysts see a slight increase in revenue to $98 billion on an annual basis. Morgan Stanley’s Woodring stated, “While we believe it’s well understood that Apple’s March quarter revenue should decline at a less-than-seasonal rate due to the pushout of iPhone demand from the December quarter to the March quarter, the consumer electronics spending backdrop remains challenging, with tablets, PCs and more discretionary products (i.e. wearables) all facing continued demand headwinds.”
Apple’s shares closed down $2.93 or 2.01% today to $143 in regular NASDAQ trading. The stock’s 52-week high is $179.61 and the 52-week low is $124.17.