Apple Predicts Stable Sales in Holiday Quarter, Apple Stock Share Prices Decline
Apple Sets Sights on Steady Holiday Sales, But Stock Faces Slippery Slope!
After reporting its fourth consecutive quarter of declining sales, Apple (AAPL) has projected flat sales for the upcoming holiday quarter, leading to a drop in Apple's stock price on Friday.
Apple Inc., based in Cupertino, California, exceeded expectations for its fiscal fourth quarter ending on September 30 but disappointed with its lackluster guidance for the December quarter. In the fiscal Q4, Apple recorded earnings of $1.46 per share, a 13% increase compared to the previous year, on sales of $89.5 billion, a 1% decrease. Analysts had anticipated earnings of $1.39 per share on sales of $89.3 billion.
Chief Financial Officer Luca Maestri revealed that excluding foreign-exchange rate changes, Apple's sales would have seen a slight increase in the September quarter. Foreign exchange fluctuations negatively affected the period, with a decrease of over 2 percentage points, as discussed during a conference call with analysts.
For the current quarter, Apple anticipates total company revenue to remain "similar to last year," Maestri stated. He noted that this year's December quarter will span the usual 13 weeks, in contrast to the 14-week December quarter from the previous year. Wall Street had been expecting a 5% sales growth in the fiscal first quarter.
Despite supply constraints on the premium iPhone 15 Pro and Pro Max models, Apple is optimistic about year-over-year growth in iPhone sales during the holiday quarter, according to Maestri.
Apple's Stock Decline
On the stock market on the same day, Apple's stock decreased by 0.5% to close at $176.65. Following the report, at least nine Wall Street firms adjusted their price targets for Apple stock.
JPMorgan analyst Samik Chatterjee maintained his "overweight" or "buy" rating on Apple stock but lowered his price target from $230 to $225. He commented on the challenging macroeconomic environment, saying,
"Despite a resilient performance, the effects of the challenging macro were evident and were more profound on certain segments than imagined."
Chatterjee raised concerns about growth if these macroeconomic effects persist.
Barclays analyst Tim Long, on the other hand, reiterated his "equal weight" or "neutral" rating on Apple stock and reduced his price target from $166 to $161. He pointed out the ongoing demand weakness in hardware categories as observed through order cuts and weak sell-through, based on their checks.
CEO Highlights Apple Vision Pro
During the analyst call, Apple's CEO Tim Cook introduced the company's upcoming mixed-reality headset, the Apple Vision Pro, which he described as a "magical product." Cook mentioned that software developers are actively creating applications for the device, which is set to launch in early 2024. He stated that developers are working on some
"truly incredible apps" for the headset, blending virtual reality with augmented reality. Cook expressed his enthusiasm about the apps being developed for Vision Pro, which include "some real blow-away kinds of things."
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Apple's stock has an IBD Composite Rating of 84 out of 99, according to IBD Stock Checkup, which combines various proprietary ratings into one easy-to-use rating. The best growth stocks generally have a Composite Rating of 90 or higher.
