Apple Inc. executives said last quarter that they had yet to see economic pressures impact consumer demand for the iPhone, but investors are going to need more convincing this time around.
Read: Apple’s rumored production cutback ‘overshadows the underlying story’ of strong iPhone 14 Pro demand “Demand has remained strong and is in stark contrast to recent concerns around a slowdown,” he wrote. Further, Apple could be realizing higher average selling prices given the indications that Pro devices are selling better than the cheaper base-level ones.What to expect Earnings: Analysts tracked by FactSet expect Apple to post $1.27 a share in earnings for the September quarter, up from $1.24 a share a year before.
Analysts project $8.9 billion in wearables, home, and accessories revenue, up from $8.8 billion a year before. And they’re calling for services revenue to top $20 billion for the first time at $20.1 billion. Apple posted $18.3 billion in revenue for that category a year ago. What else to watch for One key issue across earnings reports this cycle is the negative impact of the stronger U.S. dollar. While Apple’s management team predicted about three months back that foreign exchange could have a 600-basis-point negative impact on sales growth in the September, D.A. Davidson analyst Tom Forte notes that “the U.S. dollar strengthened against a basket of currencies that we believe are important to Apple” during the quarter. These include the British pound GBPUSD, +0.
The fact that nobody is lining up outside Apple stores to get the latest iPhone, the fact that they are steeply discounted by carrier offers so nobody buys at retail anymore, fact that Apple has made production cuts to iPhone 14 should tell you everything you need to know.