As has been the case since 2020, Apple is not expected to offer any official guidance for the holiday quarter, but Wall Street will be listening carefully for any clues the company may provide …
AAPL Q4 2022 earnings expectations
Yahoo Finance reports that the consensus view among Wall Street analysts is that Apple will show year-on-year growth of around 6%.
This maker of iPhones, iPads and other products is expected to post quarterly earnings of $1.26 per share in its upcoming report, which represents a year-over-year change of +1.6%. Revenues are expected to be $88.43 billion, up 6.1% from the year-ago quarter.
The big questions
CNBC says that the key question is whether demand for this year’s lineup has been strong enough to overcome more cautious consumer spending in the light of high inflation and economic uncertainty.
Many investors will be watching to see if Apple’s newest iPhones, which went on sale late in the quarter, are on pace for a growth cycle or if global macroeconomic conditions have finally started to weigh on the high-end electronics market.
“We don’t believe fundamentals are immune to the macro backdrop, but we see the combination of a resilient iPhone product cycle in relation to revenues rather than volumes, as well as margins, to deliver results that demonstrate resiliency above the low bar of investor expectations at this time,” JPMorgan’s Samik Chatterjee wrote in a note on Monday.
Another big question is how well the company is coping with continued supply chain shortages. iPad and Mac sales will depend as much on availability as on demand.
Apple ceased offering guidance from the start of the pandemic, citing too many uncertainties to be able to make confident predictions. This remains the case, but the company has offered a few clues during previous earnings calls. Back in July, for example, Apple CFO Luca Maestri said that he was expecting year-on-year growth in fiscal Q4.
Concerns about the holiday quarter
The very strong dollar has resulted in price increases in many parts of the world, raising concerns about demand during the holiday quarter. This is Apple’s biggest quarter of the year, combining mass-market sales for the new iPhone lineup, new iPads, and gift buying. Any clues the company might offer in terms of its expectations for holiday quarter earnings will be key to the market response.
Some analysts are concerned about AirPods and the Apple Watch in particular, as these are commonly bought as gifts in the current quarter.
“We believe Wearables are the most discretionary product in Apple’s portfolio and therefore most prone to the pullback we are seeing in consumer electronics spending,” Morgan Stanley’s Woodring said in a note.
It’s worth noting that Apple has exceeded Wall Street expectations in three of the past four quarters. Seeking Alpha suggested additional reasons for optimism.
First, French luxury products company LVMH – whose subsidiaries include a huge range of luxury brands – revealed extremely strong sales in the past quarter, suggesting no slowing of spending on premium products. Second, search volumes show no slowing of interest in Apple products.
We’ll of course be bringing you live coverage on Thursday of the numbers and Apple’s commentary.
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