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The company expects the to-be-reported quarter’s year-over-year revenue growth to be similar to that of the March quarter due to unfavorable forex.
The Zacks Consensus Estimate for revenues is currently pegged at $81.26 billion, indicating a decline of 2.05% from the year-ago quarter’s reported figure.
The consensus mark for earnings is currently pegged at $1.19 per share, up by a penny over the past 30 days and indicating a 0.83% decrease from the figure reported in the year-ago quarter.
Apple’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the earnings surprise being 2.65% on average.
Let’s see how things have shaped up for the upcoming announcement.
iPhone Revenues to Suffer From Low Demand
Apple’s fortunes are heavily reliant on the iPhone, which is by far its biggest revenue contributor. The device accounted for 54.1% of net sales in the last reported quarter, wherein sales increased 1.5% year over year to $51.33 billion.
Our model estimates for fiscal third-quarter iPhone net sales are pegged at $39.97 billion, down 1.7% year over year.
Apple is expected to have shipped roughly 44 million iPhones in the third quarter of fiscal 2023, per our model.
Per the latest Canalys report on worldwide smartphone shipments, Apple’s market share was unchanged year-over-year at 17% in second-quarter 2023, lagging Samsung’s 21%.
Services Growth to Slow Down in Q3
For the fiscal third quarter, Services revenues are expected to grow year over year (similar March quarter) despite challenging macroeconomic conditions, as well as weakness in digital advertising and gaming.
In the fiscal second quarter, Services revenues grew 5.5% from the year-ago quarter to $20.91 billion and accounted for 22% of sales.
Nevertheless, an expanding paid subscriber base has been a key catalyst for the Services business, which is riding on the increasing popularity of the App Store and an expanding installed base of devices.
Apple has more than 975 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ has been gaining recognition due to award-winning shows like Ted Lasso. Apple TV+ landed a record-breaking 54 Emmy Award nominations across its original titles this year.
The company’s animated movie, The Boy, the Mole, the Fox and the Horse, won an Oscar for Best Animated Short Film.
Apple’s impressive run at the award shows (Emmy, as well as Oscars) has been instrumental in driving recognition of Apple TV+ in the saturated streaming market currently dominated by the likes of Amazon (AMZN - Free Report) prime video, Netflix (NFLX - Free Report) and Disney’s (DIS - Free Report) Disney+.
However, that has not essentially turned into a market share gain for Apple TV+. According to 9TO5Mac, which cited a JustWatch report, Amazon prime video was #1 in terms of market share (21%) in the United States, trailed by Netflix (20%). Max, Disney+ and Hulu had 15%,13% and 11% market share, respectively. Apple TV+ maintained its market share of 6%.
Nevertheless, Apple has been keeping no stone unturned to make the TV+ service a success. At a much more affordable price of $4.99, Apple TV+ has been benefiting from quality content with its strong portfolio of original shows and movies.
Our estimate for fiscal third-quarter Services net sales is pegged at $20.98 billion, up 7% year over year.
Image: Bigstock
Apple (AAPL) to Report Q3 Earnings: What's in the Offing?
Apple (AAPL - Free Report) is set to report its third-quarter fiscal 2023 results on Aug 3.
The company expects the to-be-reported quarter’s year-over-year revenue growth to be similar to that of the March quarter due to unfavorable forex.
The Zacks Consensus Estimate for revenues is currently pegged at $81.26 billion, indicating a decline of 2.05% from the year-ago quarter’s reported figure.
The consensus mark for earnings is currently pegged at $1.19 per share, up by a penny over the past 30 days and indicating a 0.83% decrease from the figure reported in the year-ago quarter.
Apple’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the earnings surprise being 2.65% on average.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
iPhone Revenues to Suffer From Low Demand
Apple’s fortunes are heavily reliant on the iPhone, which is by far its biggest revenue contributor. The device accounted for 54.1% of net sales in the last reported quarter, wherein sales increased 1.5% year over year to $51.33 billion.
Our model estimates for fiscal third-quarter iPhone net sales are pegged at $39.97 billion, down 1.7% year over year.
Apple is expected to have shipped roughly 44 million iPhones in the third quarter of fiscal 2023, per our model.
Per the latest Canalys report on worldwide smartphone shipments, Apple’s market share was unchanged year-over-year at 17% in second-quarter 2023, lagging Samsung’s 21%.
Services Growth to Slow Down in Q3
For the fiscal third quarter, Services revenues are expected to grow year over year (similar March quarter) despite challenging macroeconomic conditions, as well as weakness in digital advertising and gaming.
In the fiscal second quarter, Services revenues grew 5.5% from the year-ago quarter to $20.91 billion and accounted for 22% of sales.
Nevertheless, an expanding paid subscriber base has been a key catalyst for the Services business, which is riding on the increasing popularity of the App Store and an expanding installed base of devices.
Apple has more than 975 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ has been gaining recognition due to award-winning shows like Ted Lasso. Apple TV+ landed a record-breaking 54 Emmy Award nominations across its original titles this year.
The company’s animated movie, The Boy, the Mole, the Fox and the Horse, won an Oscar for Best Animated Short Film.
Apple’s impressive run at the award shows (Emmy, as well as Oscars) has been instrumental in driving recognition of Apple TV+ in the saturated streaming market currently dominated by the likes of Amazon (AMZN - Free Report) prime video, Netflix (NFLX - Free Report) and Disney’s (DIS - Free Report) Disney+.
However, that has not essentially turned into a market share gain for Apple TV+. According to 9TO5Mac, which cited a JustWatch report, Amazon prime video was #1 in terms of market share (21%) in the United States, trailed by Netflix (20%). Max, Disney+ and Hulu had 15%,13% and 11% market share, respectively. Apple TV+ maintained its market share of 6%.
Nevertheless, Apple has been keeping no stone unturned to make the TV+ service a success. At a much more affordable price of $4.99, Apple TV+ has been benefiting from quality content with its strong portfolio of original shows and movies.
Our estimate for fiscal third-quarter Services net sales is pegged at $20.98 billion, up 7% year over year.
Currently, Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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