of Apple The third quarter, which ends in June, is traditionally the company’s slowest quarter of the year for sales.
This year, the “main event” won’t be Apple’s earnings, Barclays analyst Tim Long wrote, is what the company is saying about the September quarter, which is almost a third over.
Here’s what Wall Street expects from Apple, according to LSEG consensus estimates:
- earnings per share: $1.35
- Income: $84.53 billion
- Q4 Revenue Guidance: $93.39 billion
Here are the estimates for Apple’s main product lines, according to StreetAccount:
- iPhone revenue: $38.64 billion
- Mac revenue: $7.04 billion
- iPad revenue: $6.61 billion
- Mobile, home and accessory revenue: $7.83 billion
- Service income: $24.05 billion
While Apple doesn’t provide official guidance, it does provide investors with a number of data points that speak to how the September quarter is shaping up. The company typically releases new iPhones in September, but that revenue typically falls mostly in the December quarter.
“After a nearly two-year run of little to no upward revisions to estimates, we finally see a better outlook coming for the September quarter,” Long wrote in a note last month.
Investors will be eager to hear how Apple CEO Tim Cook talks about Apple Intelligence, the long-awaited artificial intelligence game that uses the company’s chips in servers and devices, rather than expensive Nvidia– cloud based computing.
Apple unveiled Apple Intelligence in June, and the first preview version of some features went live earlier this week. It’s not likely to be material to Apple’s performance yet, but it could boost “late-cycle” demand for high-end iPhone 15 models that can run the service, Long wrote.
Some analysts are looking at Apple’s capital spending, which has skyrocketed its rivals as they assemble massive server farms for artificial intelligence. But Apple’s strategy of using its own chips in servers appears to be a lower-cost approach.
“Edge AI is in very early stages, has lower capital needs and offers faster monetization through consumer hardware upgrades, which we believe makes Apple stock particularly attractive,” Raymond James analyst Srini Pajjuri wrote in a July note.
JPMorgan analyst Samik Chatterjee expects Apple to reassure investors that the upcoming iPhone replacement cycle will include better-than-expected revenue thanks to artificial intelligence. He raised his price target on the stock to $265 last month and has an overweight rating.
“The uptick in revenue, in turn, drives our expectations for upside EPS, which is likely to drive consensus revisions to full-year earnings and partially ease investor concerns about a valuation multiple premium,” Chatterjee wrote.
Apple previously told investors to expect modest overall growth in the fiscal third quarter, with stronger “double-digit” sales growth in its iPad division, driven in part by the launch of new iPad models in May. The company also said it expects about 14% growth in its profitable Services division, which covers products ranging from iCloud subscriptions to hardware warranties.
Apple’s performance in China will be under scrutiny, Bank of America Securities analyst Wamsi Mohan wrote, after sales fell 8 percent year-on-year in the second quarter amid increased competition from homegrown firms such as Huawei.
“Although aggressive promotion during the holiday 618 markets helped improve iPhone sales,” market estimates from IDC show that Apple’s sales fell while the Android market grew in China, Citi analyst Atif Malik wrote in a July note.