Apple Earnings Are About to Hit; Here’s What Wall Street Expects

This week is marked by several tech giants delivering their latest quarterly reports, not least the biggest of them all Apple (NASDAQ:AAPL). The tech giant will deliver December quarter (F1Q23) results on Thursday after the markets close.

Heading into the print, Jefferies’ Kyle McNealy thinks “expectations are modestly positive.” The analyst rates AAPL shares a Buy, while his $195 price target suggests there’s room for one-year returns of 34%. (To watch McNealy’s track record, click here)

The biggest factor impacting Apple’s December quarter (F1Q23) revolves around the disruption to iPhone production in China during the quarter. These issues are well-known, and yet McNealy expects December iPhone units to come in behind Street expectations.

McNealy’s assumption is based on an analysis of customer traffic to iPhone-related web pages collected from a sample of 21 wireless carriers. “The results for the Dec Q suggest clear evidence that iPhone performance was impacted by the manufacturing disruptions in Zhengzhou in Nov-Dec,” says the analyst. This is also reflected by the sequential drop in Apple’s website traffic. Total unique visitors (UVs) are up 26% from the same period a year ago but show a quarter-over-quarter decline of 16%.

Nevertheless, while McNealy’s December iPhone expectations are not as exuberant as the Street’s, boosted by the unit mix, his ASP (average selling price) expectations are “well ahead.” As such, while McNealy anticipates Apple sold 75 million units – 5% lower than the Street’s call for 79.2 million – the “better mix and ASP” will be able to make the difference. And this is a good omen for the current quarter. “We see this as a positive setup for the Mar Q as the mix benefits should carry forward due to sales pushed into the Mar Q as well as channel fill as manufacturing catches back up,” McNealy noted.

And this is important, because with the December quarter’s issues already well-established, McNealy thinks the forward guidance will be “much more of a focus than the December results.”  

As for the numbers, McNealy expects F1Q23 revenue of $122.4 billion and EPS of $2.01 compared to the Street at $121.8 billion and $1.94, respectively.

Overall, most of McNealy’s colleagues are also on Apple’s side. Based on 23 Buys vs. 4 Holds, the analyst consensus rates the stock a Strong Buy. The forecast calls for 12-month gains of ~18%, considering the…