Investing.com - As the week wraps up, all eyes are on Apple (NASDAQ:AAPL), which is slated to announce its quarterly earnings after the market closes on Thursday. This comes on the heels of a series of varied earnings reports from major U.S. tech companies.
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Investors are particularly interested in understanding Apple's competitive position in the Chinese iPhone market and getting a sense of global consumer spending trends. They're also keen to learn about the progress of Apple's shift towards becoming a services-oriented business.
Here's a brief overview of what Wall Street analysts predict for Apple's key metrics during the fiscal fourth quarter:
- They anticipate a revenue of $89.34 billion, down slightly from the $90.15 billion reported in the fourth quarter of 2022.
- The projected adjusted earnings per share (EPS) is $1.39, compared to $1.29 in the same quarter of the previous year.
- They expect iPhone revenues to reach $43.73 billion, a slight increase from $42.63 billion in Q4 2022.
- Services revenue is forecasted to hit $21.36 billion, up from $19.19 billion in Q4 2022.
- Mac revenue is predicted to be $8.76 billion, down from $11.51 billion in Q4 2022.
- iPad revenue is estimated at $6.33 billion, a decrease from $7.22 billion in Q4 2022.
- Finally, wearables revenue is projected to be $9.41 billion, slightly less than the $9.65 billion in Q4 2022.
- The impending earnings report comes just after Apple's recent 'Scary Fast' virtual event, where they showcased their latest MacBook Pro lineup and updated iMac.
Analysts have raised concerns about the slowing demand for Apple devices, especially in China, where local competition for the flagship iPhone is intensifying. Both iPad and Mac sales are expected to experience double-digit declines for the quarter compared to the same period last year.
However, the services segment remains a beacon of hope for CEO Tim Cook. Analysts predict double-digit growth in this area, the only Apple segment expected to show such significant expansion. While the company's cutting-edge hardware has helped it attain trillion-dollar status, its evolution into a service provider and its ventures into music, gaming, and entertainment fuel optimistic forecasts for its future.
Apple's financial influence extends beyond its top-tier position in the S&P 500 index. It shapes the portfolios of both institutional and retail investors due to its vast consumer base and operations in key markets like China. Consequently, Apple's performance serves as a bellwether for broader trends in consumer spending and technology adoption.
The announcement of Apple's earnings comes at a critical juncture for Wall Street and tech stocks in general. Over the past six months, the S&P hasn't seen a single percentage point gain. Furthermore, tech giants, which have traditionally provided investors with hefty returns, are currently grappling with challenges. Investors have become more discerning, questioning recent surges in valuations and the enthusiasm around AI.
This heightened scrutiny has led to diverging paths for successful tech giants like Apple, Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT). In October, Apple's stock posted a loss of 0.3% after slipping more than 8% in September, positioning it in the middle of the pack. On Thursday, the latest earnings will reveal whether Apple's stock will align with the few tech giant winners.