[Earnings Preview] Is Apple scheduled to announce financial results on Friday “The Return of the King”? Will it exceed Wall Street expectations due to the rapid increase in iPhone sales in China and Apple Intelligence?
● $Apple (AAPL.US)$ Financial results are scheduled to be announced after closing on 10/31 US Eastern Time (6:00 a.m. on Friday 11/1 Japan time).
● According to market consensus, Apple's 2024Q4 earnings forecast is 94.316 billion dollars, with sales up 5.38% from the same period last year. EPS is expected to be 1.53 dollars, up 4.77% from the same period last year.
● Market demand for the iPhone 16 is the focus of financial results this time.
●Will Apple Intelligence bring about a “super cycle”?
● According to market consensus, Apple's 2024Q4 earnings forecast is 94.316 billion dollars, with sales up 5.38% from the same period last year. EPS is expected to be 1.53 dollars, up 4.77% from the same period last year.
● Market demand for the iPhone 16 is the focus of financial results this time.
●Will Apple Intelligence bring about a “super cycle”?
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$Apple (AAPL.US)$ After closing on 10/31 EST (Friday, November 1 at 6 a.m. Japan timeFinancial results will be announced on). According to market consensus, Apple's 2024Q4 earnings forecast isSales were 94.316 billion dollars, up 5.38% from the same period last year. EPS is expected to be $1.53, up 4.77% from the same period last yearIt's been done.
The iPhone 16 is in focus
At the financial results briefing, Apple Chief Executive Officer (CEO) Tim Cook will announce the latest iPhone demand data.
At the financial results briefing, Apple Chief Executive Officer (CEO) Tim Cook will announce the latest iPhone demand data.
The market anticipates that iPhone sales in the fourth quarter will completely reverse from the decline in the previous two quarters and increase by 3.8%. iPad sales are expected to increase 10.1% to 7 billion 90 million dollars compared to the 23.7% increase in the previous quarter, mainly due to the introduction of higher performance versions of the iPad in the previous quarter. Service revenue is expected to rise 13.3%, slightly lower than the previous quarter.
By region, 42.2 billion 30 million dollars, which is almost half of Apple's total revenue, comes from the Americas, and China's revenue is expected to be 16 billion80 million dollars, an increase of 6% or more compared to the same period last year. Apple is recovering its share in the Chinese market.
According to IDC data, after falling to 6th place in the second quarter, Apple gained the second-highest market share in the Chinese smartphone market with 15.6% in the third quarter. This is also largely due to the release of the iPhone 16. According to the data, initial sales of the iPhone 16 were about the same as the iPhone 15. IDC has stated that “demand for iPhones will grow further due to future promotions and the launch of Apple Intelligence.”
According to data from the research company Counterpoint Research, in ChinaThe number of units sold of the iPhone 16 increased by 20% in 3 weeks after release compared to the iPhone 15 seriesI did it. The data also shows that Chinese consumers prefer the more expensive Pro and Pro Max models, with a 44% increase in sales compared to the same period last year.
Meanwhile, in the US market, according to Brandon Nispel, an analyst at the market research and analysis company KeyBanc Capital Markets, iPhone upgrades have decreased 9% compared to the same period last year according to the latest data from US wireless carriers such as Verizon, AT&T, and T-Mobile, which is a bad sign.
How do Wall Street analysts view iPhone 16?
JPMorgan analyst Samik Chatterjee pointed out that the delivery cycle of the iPhone 16 series has decelerated into the 8th week since the September release, and an even larger pullback can be seen for the high-priced Pro model. Mr. Chatterjee stated, “The deceleration range is slightly larger than a year ago, but the total delivery cycle for the iPhone 15 is almost straight, which suggests that although it is slightly below last year's level, demand continues to be solid.” He predicts that Apple's fourth quarter results will exceed expectations, but results for the first quarter of the 2025 fiscal year (fiscal year ending 2024/12) will fall below analysts' average expectations. Mr. Chatterjee predicts that Apple's stock price will be “held” and the target stock price will be 265 dollars.
JPMorgan analyst Samik Chatterjee pointed out that the delivery cycle of the iPhone 16 series has decelerated into the 8th week since the September release, and an even larger pullback can be seen for the high-priced Pro model. Mr. Chatterjee stated, “The deceleration range is slightly larger than a year ago, but the total delivery cycle for the iPhone 15 is almost straight, which suggests that although it is slightly below last year's level, demand continues to be solid.” He predicts that Apple's fourth quarter results will exceed expectations, but results for the first quarter of the 2025 fiscal year (fiscal year ending 2024/12) will fall below analysts' average expectations. Mr. Chatterjee predicts that Apple's stock price will be “held” and the target stock price will be 265 dollars.
Mr. Chatterjee said, “Sales of the iPhone 16 series started slower than the iPhone 15, and although they have regained momentum in recent weeks, sales are still slightly below last year's level. As a result, we expect Apple iPhone sales for the first quarter of 2025 to fall short of analysts' average expectations.”
According to Barclays analysts, there is a possibility that Apple's third-quarter financial results will benefit from strong sales in the latter half of the iPhone 15 and growth in the service business. There is a high possibility that the number of iPhones shipped will exceed the 51 million unit, which is the average forecast of analysts, and service revenue will increase by about 13% to 14% compared to the same period last year, and it is said that it will slightly exceed market expectations. Similarly, Barclays sees that since the number of iPhones 16 is mixed, there is a possibility that Apple's financial results for the first quarter of fiscal 2025 will be exposed to risk.
According to Barclays, “there is a possibility that potential production cuts will affect the number of units shipped in early 2025.”
The city is also, in particularThere are many difficulties ahead for Apple, such as the postponement of the release of Apple IntelligenceI'm watching it. Overall iPhone sales for the fourth quarter and the first quarter of 2025 are expected to fall short of Wall Street expectations since some Apple Intelligence functions will be postponed until next spring. Nonetheless, City has not lost its optimism about Apple's 2025 fiscal year, and they anticipate that the iPhone 17 will lead a strong upgrade cycle.
Will Apple Intelligence bring about a “super cycle”?
At the financial results briefing, investors will also pay attention to the latest progress of Apple AI. Analysts are concerned that delays in the deployment of Apple Intelligence functions will have an impact on the “super cycle” that the market is waiting for.
At the financial results briefing, investors will also pay attention to the latest progress of Apple AI. Analysts are concerned that delays in the deployment of Apple Intelligence functions will have an impact on the “super cycle” that the market is waiting for.
Bernstein analyst Toni Sakconaghi said, “The strength of the iPhone 16 cycle is the most important issue for the fourth quarter of 2024 and the first quarter of 2025. Investors should expect Apple to be optimistic about the iPhone 16 and Apple Intelligence, but that alone cannot determine whether this cycle will ultimately succeed.”
Meanwhile, Wedbush analyst Dan Ives, who has been bullish on Apple for many years, sees that not only will Apple's fourth quarter financial results exceed Wall Street's expectations, but the first quarter of 2025 (fiscal year ending 2024/12) will similarly perform well.
Mr. Ives said, “In the Asian supply chain, the current iPhone upgrade cycle has become historic, and signs continue showing that there is a possibility that it will be the stage for a supercycle. We expect that around 0.3 billion iPhones worldwide have not been upgraded in over 4 years,” he said. Furthermore, he added, “If the AI upgrade cycle continues, there is a possibility that Apple will sell 0.2 billion 40 million or more iPhones this fiscal year, which will be the highest number of iPhones sold in Apple history.”
Mr. Ives described Apple stock as “outperforming,” and his target share price is 300 dollars.
There is still no conclusion as to whether Apple Intelligence will actually contribute to boosting iPhone demand. There are analysts who expect the new AI function to boost iPhone sales, but analysts at investment bank Jefferies recently reportedUpgrades that include limited hardware features and relatively small AI models aren't enough to significantly boost iPhone sales growthIt is stated.
— MooMoo News Zeber
Source: moomoo, Bloomberg
This article uses automatic translation for some of its parts
Source: moomoo, Bloomberg
This article uses automatic translation for some of its parts
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