Apple's (AAPL) financial report for the September quarter is scheduled to be released on Thursday afternoon, giving outsiders a glimpse of the performance of the iPhone 15, as the quarter's results include sales of the consumer electronics giant's new product lineup for just over a week. The comments made by the management during the financial report conference call will reveal more information.
Prior to the release of Apple's fourth quarter financial report, Morgan Stanley analyst Erik Woodring wrote in a report to clients earlier this week: "Despite slightly outstanding performance over the past month, we still tend to be cautious in terms of tactics regarding Thursday's financial report
Woodrin is concerned about the "imbalance in consumer spending" and supply constraints, which may lead Apple to suggest that the revenue range for the holiday season is below average expectations and below normal levels at this time of year.
The company also faces concerns related to its Chinese business, as Piper Sandler analyst Harsh Kumar pointed out that the region has a high comparative base, intensified local competition, and a sluggish macroeconomic situation.
Kumar wrote, "Overall, although the Indian market will alleviate the impact of declining sales in the Chinese market to some extent, we believe this is not enough to offset the impact of global and Chinese market weakness." He also lowered his overall revenue forecast for the fiscal quarter ending in December to $120.9 billion, which is lower than the average expected value of $123.1 billion surveyed by FactSet.
The current situation is that analysts expect Apple to hit an ignominious record in the fourth quarter ending in September, as they expect the company's revenue to decline for the fourth consecutive quarter, reaching $89.3 billion. If that were the case, it would be Apple's first consecutive four quarters of year-on-year sales decline since 2001.
However, even Kumar's lower than average forecast for Apple's fiscal quarter ending in December suggests that the company will halt its revenue decline trend during the holiday season at the end of this year, as Apple's sales for the same period last year were $117.2 billion.
Amit Daryanani of Evercore ISI believes that the average forecast for the September quarter's revenue target is achievable for Apple, but he believes that the revenue target for the fiscal quarter ending in December "appears to be more difficult to achieve" as it is expected to grow by 5.5%.
He wrote, "Nevertheless, considering the relatively low base, strong service performance, and slight increase in average iPhone selling price, we believe this goal should be achievable." Apple has increased the minimum memory capacity of the iPhone 15 Pro Max from 128GB to 256GB, which has actually raised the starting price of the model, which may be beneficial for pricing trends.
Although the performance of iPhones is the key, analysts will also pay attention to the dynamics of the iPad and Mac, as the latter two may not perform well.
Daryanani wrote, "Mac and iPad sales are likely to continue to decline significantly, but the average expected 15% -25% decline seems to have fully taken this into account
Analysts surveyed by FactSet expect iPad sales revenue to be $6.2 billion in the September quarter, down from $7.2 billion in the same period last year; Mac sales revenue was $8.5 billion, down from $11.5 billion in the same period last year.
In the past three months, Apple's stock price has fallen by a cumulative 11%, while the Dow Jones Index has fallen by about 7% over the same period. Apple is a constituent stock of the Dow Jones Index.