News from the Financial Associated Press, Shanghai, January 30 (edited by Huang Junzhi)Apple will announce its results for the first quarter of fiscal year 2023 after the U.S. stock market closes on February 2. The market currently expects that Apple’s Q1 revenue will be US$122.05 billion, a year-on-year decrease of 1.5%, and earnings per share will be US$1.96, compared with US$2.1 in the same period last year.
Bank of America (Bank of America) analyst Wamsi Mohan said that since everyone has expected a somewhat disappointing quarterly report, Q1 performance is not the focus of attention, and future performance guidance is expected to be the focus of the market this time because Any commentary from Apple on the coming quarters is likely to be lower than expected.
Mohan has a Neutral rating on Apple and a price target of $153 per share. He pointed out that Apple’s revenue decline in the second fiscal quarter ended in March may be 20% higher than expected.
“Given the severely constrained supply of high-end iPhone Pro models (in the fiscal first quarter ended December), the tone of this earnings call will be critical to understanding the trajectory of underlying demand going forward,” he wrote in a note to clients. Important. In our view, demand (in the first half of 2023) may be softer than expected.”
Missed the golden sales season
Joshua Warner, a senior analyst at GAIN Capital Group, also pointed out that the first fiscal quarter is the peak season for holiday consumption, which is usually the best quarter of the year. In the first fiscal quarter of fiscal year 23, there is a high probability that revenue will decline. This will be the first time that Apple has missed the growth of the “golden sales quarter” since at least the beginning of this century. The debate now is how many of these deferred sales will be carried over to 2023, and how many will disappear entirely.
He believes that the longer Apple waits to resolve production issues, the greater the risk as consumers must wait patiently for new iPhones due in 2023 or switch to competing models.
Apple has cut its handset production forecast by 3 million units in response to weak demand and supply chain constraints, but some analysts believe the impact could be bigger. Demand for low-end models is not as strong as originally expected, while high-end models such as the Pro and Pro Max have also encountered bottlenecks, which may lead to short supply in this critical quarter.
Warner expects Apple’s first-quarter earnings per share to fall 6.9% to $1.95. He also pointed out that last year, Apple used its healthy cash balance and accelerated share buybacks to help prop up its income statement; now it can continue that strategy if it wants to capitalize on the falling stock price and boost earnings per share.
Mohan slightly lowered the bank’s forecast for Apple’s earnings per share in fiscal 2023. He now expects Apple to earn $5.73 per share this year, down from a previous forecast of $5.82. At the same time, however, he raised his revenue forecast slightly, and he now believes Apple will generate $389 billion in revenue this year, up from his previous forecast of $383 billion.
Challenging first half
Mohan also said Apple could face challenges in the first half of the year from a supply and demand perspective, partly due to a weaker iPhone cycle. Apple’s performance in the second half of the year remains in doubt, given the weak economy, the launch of a new iPhone in the second half, and the company’s upcoming mixed reality headset, which is expected to launch later this year.
Finally, Mohan also added that, on the bright side, it would be a “positive incremental” if Apple’s services business accelerated again due to improvements in video games and a stabilizing advertising business.
In addition, other positive factors may include reduced exchange rate impact, China’s optimized epidemic prevention and control policies, and Apple’s continued introduction of more components in-house, making progress in vertical integration.