AAPL Q3 2023 Earnings: What to Expect
$Apple(AAPL.US$ stock has gone on an impressive run, rising some 50% year to date, almost three times the 18% gain in the S&P 500 index. Its shares have returned more than 30% just in the past six months, pushing the tech giant past a $3 trillion valuation. The market is clearly bullish on the company’s growth potential.
$Goldman Sachs(GS.US$ analyst Michael Ng expects Apple to surpass earnings estimates, led by strength in its Mac and Services segments. Ng is expecting Services revenue of $21.8 billion to rise 11% year over year, clearing Wall Street forecasts of $20.7 billion. “Upside to our Services forecast reflects the inflection in App Store spending, per Sensor Tower, strong growth in advertising, continued content investments in AppleTV, and a more benign forex headwind relative to company guidance of -400 bps," Ng wrote in an investor note.
The market will also look for additional details about the its long-awaited mixed reality headset, dubbed Vision Pro, which was unveiled at the company's Worldwide Developers Conference. Wall Street analysts were impressed, including Credit Suisse analyst Shannon Cross who said the device "solves many of the technical limitations.” At a hefty price tag of $3,499, the questions becomes how much revenue and profits can Apple expect upon launch. This and other topics will be front and center on the conference call with analysts on Thursday.
The tech giant has benefited from, among other things, the re-opening of China, its second-largest market. Despite the overall smartphone market shrinking amid an economic slowdown, recent reports suggests Apple is still gaining share in the Chinese smartphone market during the second-quarter, with iPhone sales rising 6.1%.
Apple’s overall Chinese smartphone market shares stands at 15.3%, according to research firm IDC, which noted a 2.1% decline in Q2 smartphone shipments in China. It’s notable that Apple still experienced growth. Could that be a sign of things to come during the quarterly results given that iPhone sales generate a sizable portion of revenues? This was the theme in the second quarter, with Apple beating on both the top and bottom lines, thanks to 1.5% rise in iPhone sales to $51.33 billion.
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