Article by IG Market Analyst Tony Sycamore
When will Apple report its latest earnings?
Apple is scheduled to report its first (Q1) earnings on Thursday, February 1, 2024.
The backdrop
Apple Q4 2023 earnings, reported in early November, beat analysts' expectations for sales and earnings per share, but the company said its quarterly revenues fell 1% year over year.
Tim Cook, Apple's CEO, said, "We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon-neutral Apple Watch models, a major milestone in our efforts to make all Apple products carbon neutral by 2030."
Digging deeper into the Q4 2023 earnings report, the following highlights could be observed.
• An all-time revenue record in Services of $22.31 billion vs the $21.35 billion expected. The Services segment includes subscriptions like iCloud Storage, App Store and Apple Music.
• A September quarter revenue record for iPhone of $43.81 billion. Furthermore, the iPhone was the only hardware line for Apple to show growth in the quarter, as Apple's Mac and iPad business contracted during the quarter. The period only included about one week of iPhone 15 sales.
• The Wearables section, which includes Air Pods and Apple Watches, fell over 3% YoY.
Net Sales by Category
Source Apple.com
Of concern to shareholders, Apple's sales in Greater China, its third largest market, were flat on the year. Chinese government officials are banned from using Apple's devices in favor of homegrown products like Huawei. Outside of the public sector, the Chinese consumer remains cautious, as the Chinese economy remains tepid.
Net Sales by Segment
Source Apple.com
What to look for in Q2?
In its Q4 Earnings call, CFO Luca Maestri guided that Apple expected December quarter revenue to be like last year's.
After a recent broker upgrade, which helped to spark a sharp move higher in the Apple share price, there will be interest in commentary around the following topics.
• The potential for long term gains as the company integrates AI into iPhones.
• Prospects for the Vision Pro virtual reality headset, which is scheduled to launch on February 2 – a launch which seems to be lacking "buzz".
• Whether Apple continues to win market share in a contracting Chinese market.
• An update in iPhone 15 sales.
• The impact of the removal of the Oxygen feature from Apple Watches after its legal setback.
• Insights into the iPhone 16 due for release in September of this year.
Key Financials - Summary
Wall Street's expectations for the upcoming results are as follows.
• EPS: $2.11 vs $1.46 per share previous quarter
• Revenue: $117.95 billion vs $89.5 billion
Apple’s Sales Revenue
Source Trading Economics
Technical Analysis
Following an almost 48% gain in 2023, Apple's share price has shaken off some New Year nerves to be trading higher in January, just 2.5% below its $199.62 all-time high.
Providing Apple's share price remains above a band of support near $180.00/75, which includes the 200-day moving average at $181.45, recent lows in the $180 area, and uptrend support, we expect to see Apple's shares break above resistance at $199 in the coming months towards $220.00.
Aware that if Apple's share price were to see a sustained break below $180/75, it would warn that a deeper pullback is underway, initially towards the $165.57 low from last October.
Summary
Apple is scheduled to report its first (Q1) earnings on Thursday, February 1, 2024. Ahead of the release, Apple's share price is holding above important support at $180/75 but below its all-time high at $199.62. An earnings beat and positive forward guidance should catalyse a push to new all-time highs.
