iPhone sales were constrained during the quarter because of issues with supply. Apple in November sent out a press release warning about COVID-19 impacts on iPhone 14 Pro and Pro Max shipments, letting customers know to expect longer than normal wait times.
Apple (Nasdaq: AAPL) is scheduled to announce earnings for the first fiscal quarter of 2023 (fourth calendar quarter) on Thursday, February 2. Apple is expected that revenue is $122.063 billion, adjusted net income is $31.309 billion, and adjusted EPS is $1.955 per share, according to Bloomberg's consensus expectation.
Latest Results
For the fourth fiscal quarter of 2022, Apple posted revenue of $90.1 billion and net quarterly profit of $20.7 billion, or $1.29 per diluted share, compared to revenue of $83.4 billion and net quarterly profit of $20.6 billion, or $1.24 per diluted share, in the year-ago quarter.
Analyst Opinons
Rosenblatt (cuts price target to $165, reduces FQ1 estimates): “We expect better trends in later periods, reflective of a more normalized environment… We assume Apple can deliver MSD LT sales/EBITDA growth, with repo driving ~10% in EPS. The company's brand leadership, and innovation opportunities (EV cars, AR/VR, financial/media services) we believe will allow it to retain a premium 20x P/ FCF in 10 yrs, NPV'd to $165 in year, with estimate cuts driving the 13% PT reduction.”
Barclays (cuts price target to $133, lowers FQ1 and FQ2 estimates): “We did another round of checks with China channel and supply chain partners in the last few days. What started out as production-driven cuts has moved to demand weakness across product categories… At a 20% premium to the S&P 500, we see the stock as fairly valued at best. Manufacturing issues aside, we believe we are witnessing the catch-up from strong COVID performance across product categories. Service revenues have been decelerating as well. We see pressure to estimates and PE multiple in 2023.”
Wedbush (cuts price target to $175): “The core iPhone 14 Pro demand appears to be more stable than feared and is still coming out of the supply chain abyss seen in November/December due to the zero COVID lockdowns in China/Foxconn. While March and June could see some cutting of iPhone orders (iPhone 14 Plus remains a major strikeout), we believe the overall demand environment is more resilient than the Street is anticipating and thus we believe baked into the stock is a massive amount of bad news ahead."
KeyBanc (reaffirms Buy): “Consensus expects a lower growth quarter than AAPL's historical average. Consensus Hardware revenue estimates have come down (iPhone revenue/units are -5%/6%, respectively, since the end of Oct.) in response to the impacts to supply and demand for iPhone, though we believe there is still room for further downside risk, and we would expect buy-side expectations to be conservative.”
Morgan Stanley (reaffirms Overweight, sees $115-120 as a near-term floor for Apple stock): “We 1) have not picked up any recent readjustment to product orders in our supply chain checks, 2) have already baked in what we believe in an appropriately conservative near-term forecast, and 3) believe that bigger picture, the core drivers of Apple's model remain unchanged.”
Evercore ISI (reaffirms Outperform): “Growth rates should continue to improve through 2023 as comps get easier and we should see mid-single digit or better growth every quarter in 2023. In addition to the easier comp and China recovery, the drivers of the improvement this month likely also include a weaker dollar and the price increase pushed through by Apple starting in early October.”