Given recent production issues in China, analysts have tempered their expectations for Apple AAPL +3.16%’s financial results. However, other crosscurrents make the report a little hard to call.
The most important issue Apple must address in its December quarter report, due Thursday afternoon, is the impact of a clear slowdown in consumer spending on PCs, mobile phones, and other electronics on product demand. In the meantime, the waning strength of the dollar could skew the results.
Company Atock Analysts’ Expectations
Apple is expected to report sales of $121.7 billion for its fiscal first quarter, down 1.8% from the year-ago period and marking the first year-over-year quarterly decline since 2019. The projected earnings per share are $1.95, down from $2.10 a year earlier.
Early in the pandemic, Apple stopped giving out detailed financial forecasts and has shown no signs of starting up again. Nonetheless, on the most recent earnings call in late October, CFO Luca Maestri did provide some color on the outlook, albeit with generally cautious comments.
Here are the predictions made by industry experts based on Apple’s performance in the same quarter last year.
- Expected revenue of $121.1 billion, down from Q1 2022’s $123.9 billion
- Comparing Q1 2022’s expected $2.10 EPS to Q1 2021’s $1.94 EPS, the difference is clear.
- Revenue from iPhones is predicted to be $68.3 billion, down from $71.6 billion in Q1 2022.
- Expected Mac sales for Q1 2022: $9.72 billion, down from Q1 2022’s $10.8 billion
- iPad revenue: $7.7 billion expected versus $7.2 billion in Q1 2022
- Wearables: $15.3 billion expected versus $14.7 billion in Q1 2022
- Services: $20.4 billion expected versus $19.5 billion in Q1 2022
Apple has surpassed the majority of its Big Tech peers over the past year, with shares down 16% as of Wednesday afternoon, compared to 18% for Microsoft (MSFT) and 25% for Google parent Alphabet (GOOG, GOOGL). However, it has not been without its own problems.
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COVID-19 Was A Major Headwind For Apple
In November and December, Apple faced significant headwinds due to COVID lockdowns and worker protests at Foxconn’s Zhengzhou, China facility. The plant, which employs 200,000 individuals, manufactures the majority of Apple’s iPhone 14 Pro and iPhone 14 Pro Max devices.
The iPhone 14 Pro and iPhone 14 Pro Max, starting at $999 and $1,099, are two of Apple’s most important devices. Their higher prices contribute to an increase in the average iPhone selling price, resulting in increased revenue for the tech giant.
According to IDC’s Worldwide Quarterly Mobile Phone Tracker, iPhone shipments decreased by 14.9% year-over-year, from 85 million units in Q4 2021 to 72.3 million units in Q1 2022.
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