Apple is poised to release its second fiscal quarter earnings report tomorrow, having previously informed investors to anticipate a revenue decline of about $5 billion compared to the same period last year.
Analysts share this expectation, viewing the outlook for Apple’s third fiscal quarter with some skepticism. The company’s forward-looking guidance will be closely scrutinized by investors seeking clearer insights into future performance.
Despite the pandemic appearing to be over, it is still considered in year-over-year performance comparisons. No specific guidance has been provided by Apple recently, but the company’s CFO, Luca Maestri, cautiously lowered expectations for the second quarter back in February after announcing the first quarter results.
He noted that the quarter ending in December last year faced production halts due to COVID-19, severely limiting the supply of iPhone 14 Pro and 14 Pro Max. The March quarter, however, managed to replenish channel inventory to meet the significant demand generated by the previous constraints.
It’s estimated that this added nearly $5 billion to the revenue for the March quarter last year. Excluding this impact from last year’s figures, the revenue for this March quarter is expected to align with the previous year.
While analysts’ forecasts do not always align with the guidance provided by Apple, in this case, they too predict revenue of around $90 billion. According to data compiled by Yahoo Finance, the average analyst expectation is a 5.1% year-over-year decrease to $90.01 billion.
Thanks to Apple’s continuous stock buybacks, which dilute the total number of shares outstanding, the decline in earnings per share (EPS) is expected to be minimal. Last year’s EPS was $1.52, with analysts forecasting $1.50 for this year.
Analysts are optimistic about Apple’s long-term prospects. The average target price for AAPL stock is $198.90, well above its current price of $170.33. This year could be pivotal for Apple as it ventures into generative AI, potentially revolutionizing the functionality of Siri. iOS 18 is regarded as one of the company’s most significant and exciting updates.
As soon as the earnings report is released, sources will provide timely updates on the information.
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