July 20, 2023 – As the anticipation builds for Apple’s second-quarter earnings report, Wall Street is beginning to adjust its expectations for Apple’s performance in the second quarter and beyond. However, some analysts are expressing concerns about Apple’s performance, as recent iPhone sales appear to be sluggish.
According to a report by Barron’s, analyst Mohan from BofA Global Research released a research note yesterday suggesting that Apple’s upcoming second-quarter earnings report, scheduled for release on August 3, may “roughly meet” Wall Street estimates. He believes that Apple’s second-quarter revenue will be around $80.7 billion, with earnings per share of $1.17, slightly lower than the market’s previous expectations of $81.8 billion in revenue and earnings per share of $1.19.
Mohan pointed out that while Apple’s management predicts a 4% impact on revenue due to exchange rate fluctuations, he believes the actual impact will be less than 2%.
However, Mohan expresses concern about Apple’s performance in the third quarter, as his sources indicate a possible delay in the launch of the new iPhone (referred to as iPhone 15 for now) by several weeks, pushing it to the fourth quarter of this year. He estimates that even with a 2.5% boost from exchange rate fluctuations in the fourth quarter, Apple’s third-quarter revenue will be only around $87.1 billion, significantly lower than the previous average Wall Street estimate of $91.6 billion.
Mohan predicts a year-on-year decline in sales for Apple’s hardware segment in the second quarter, and based on the potential timing of the iPhone 15 release and the higher base of Mac computer sales, he expects a further reduction in product revenue for the third quarter. He estimates iPhone sales of 48 million units in the third quarter, below the previous average Wall Street estimate of 51 million units.
Despite raising Apple’s target stock price from $190 to $210, Mohan maintains a neutral rating.
