Despite Q1 & Q2 releases, Apple predicted to report bad hardware sales figures

AppleInsiderAppleInsider
Posted:
in AAPL Investors edited May 2023
Apple is predicted to have a drop in revenue year-over-year for Q2 2023, according to TD Cowen, with results forecast to show declines in iPhone, iPad, and Mac for the quarter.

iPhone 14
iPhone 14


Apple will be releasing its financial results for the second quarter of 2023 on May 4, and analysts believe it will be a fairly typical report. In a note to investors ahead of Apple's results, TD Cowen believes the figures will be in line with general expectations.

Cowen models overall revenues at a 5% decrease year-on-year, with revenue at $92.2 billion for the quarter. Earnings per share is expected to be $1.43.

It is estimated that seasonal iPhone demand and "relatively weaker year-on-year iPad, Mac, and Wearables shipments" along with "normalizing demand and product launch timing" will result in slightly decreased results.

For iPhone, Cowen believes that improved early shipments into China helps matters, but to expect iPhone revenues to be down 5% YoY. The new retail stores in India could "unlock a new source of demand as the year progresses," which will help future quarters.

Sales of iPads are modeled to be down seasonally, while Mac is also suffering from a "weaker computing demand," though M2 chip launches could still be a "positive effect." Cowen thinks iPad and Mac builds could be down 5% and 14% respectively.

Services will still continue to grow on "easy comps," though Cowen warns there could be some "downside risk to licensing revenues given digital advertising market trends."

"From a stock standpoint, we believe AAPL remains a defensive name given its market cap, strong FCF supported by iPhone and Mac replacement demand, and capital returns of $90-100B. AAPL typically raises the dividend on the Mar Q earnings call," the analysts add.

Cowen has given Apple an "Outperform" rating, with a price target of $195.

Read on AppleInsider

Comments

  • Reply 1 of 6
    red oakred oak Posts: 1,088member
    Apple literally said this themselves on their last earnings call.  And, they said iPad and Mac would be down double-digits 

    No surprises here
    FileMakerFeller
  • Reply 2 of 6
    looplessloopless Posts: 329member
    It’s called “stock price manipulation”
  • Reply 3 of 6
    sdw2001sdw2001 Posts: 18,016member
    "Bad hardware sales figures."  

    OK, this is the problem.  "Bad hardware" figures cannot equate with "some decline year to year."   As an enthusiastic capitalist, I must say that one of the problems with our system is that often, corporate value is determined by endless growth.  

    Apple sells an average of 55 million+ iPhones per quarter.  That's nearly a quarter of a billion iPhones per year.  So if they sell 60 million in Q2 a year prior, a "bad" number is 58 million?  That's the headline.  The same goes for revenue.  In 2013, Apple had revenues of less than $200b.  10 years later, their revenue has doubled to almost $400b.   But somehow if Q2 2023 is 2% lower than Q2 2022, it's doomsday.  
    beowulfschmidtFileMakerFeller
  • Reply 4 of 6
    danoxdanox Posts: 2,853member
    Sounds like Apple should’ve made a wider range of Mac computers, instead of the tiny selection of new Apple Silicon computers, they have managed so far in the transition to new chips, maybe the lower numbers will force Apple off of the pot? millions of people are waiting for something more.
  • Reply 5 of 6
    waveparticlewaveparticle Posts: 1,497member
    sdw2001 said:
    "Bad hardware sales figures."  

    OK, this is the problem.  "Bad hardware" figures cannot equate with "some decline year to year."   As an enthusiastic capitalist, I must say that one of the problems with our system is that often, corporate value is determined by endless growth.  

    Apple sells an average of 55 million+ iPhones per quarter.  That's nearly a quarter of a billion iPhones per year.  So if they sell 60 million in Q2 a year prior, a "bad" number is 58 million?  That's the headline.  The same goes for revenue.  In 2013, Apple had revenues of less than $200b.  10 years later, their revenue has doubled to almost $400b.   But somehow if Q2 2023 is 2% lower than Q2 2022, it's doomsday.  
    It is a fair game. Market priced AAPL according to sales factored by profit margin. Between 2013 and 2023, AAPL has been up and down considerable. It really took off after March 2019. What happened then? In retrospect, this was due to US government merciless killing of Huawei ensured Apple iPhone sales worldwide. 

    edited May 2023
  • Reply 6 of 6
    FileMakerFellerFileMakerFeller Posts: 1,546member
    AppleInsider said:
    Services will still continue to grow on "easy comps," though Cowen warns there could be some "downside risk to licensing revenues given digital advertising market trends."
    Trends such as avoiding Twitter like the plague? Or trends such as wanting to siphon every speck of private data from the end user under the guise of wanting enough information to build an accurate targeting model?

    Apple's making enough easy money through services to weather the "slightly less than what might be possible if ethics were abandoned" aspersions from market analysts.
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