AAPL Q4 2023: Analysts optimistic, despite warnings and negative signs

Tomorrow will see the announcement of AAPL Q4 2023 earnings, at a time when hardware revenue has been falling, and Apple itself has warned investors to expect big year-on-year drops in iPad and Mac sales.

While Apple suggested that the previous quarter might not beat the previous quarter’s $81.8B revenue, and there have been signs that all is not well with iPhone sales, analysts appear optimistic …

Yahoo! Finance reports a consensus revenue expectation of $84.18B. While that would be significantly down on the record $90.15B in the same quarter last year, it would be up on the previous quarter’s $81.8B.

Apple last year set record earnings, with Mac income the headline news – up 25.4% year on year. That was in large part driven by the ending of supply constraints, boosting sales during the quarter.

That same factor is now set to bite Apple this year, thanks to a compare with a peak quarter, as CFO Luca Maestri warned in the previous earnings call.

We expect our September quarter year-over-year revenue performance to be similar to the June quarter, assuming that the macroeconomic outlook doesn’t worsen from what we are projecting today for the current quarter. Foreign exchange will continue to be a headwind, and we expect a negative year-over-year revenue impact of over 2 percentage points.

We expect iPhone and Services year-over-year performance to accelerate from the June quarter. Also, we expect the revenue for both Mac and iPad to decline by double digits year-over-year due to difficult compares, particularly on the Mac. For both products, we experienced supply disruptions from factory shutdowns in the June quarter a year ago and were able to fulfill significant pent-up demand in the year ago September quarter.

At the time, Apple was optimistic about early iPhone 15 revenue, but there have been indications since then that sales may be below that of the iPhone 14 line-up – especially in China.

Despite this, however, analysts expect quarter-over-quarter growth, and still consider the stock a solid bet. As of today, of the 38 analyst stock recommendations tracked by Yahoo!, 11 of them rate AAPL as a “strong buy,” 21 as a “buy,” six as a “hold” and none as a “sell.”

The consensus target for the share price is $187.73, against today’s price of $171.40 at the time of writing.

We’ll of course be bringing full coverage of tomorrow’s financials and earnings call.

Photo: Artem Sapegin/Unsplash