Tech giant Apple, Inc. AAPL is scheduled to announce its fiscal year 2024 third-quarter results after the market closes on Thursday. Investors have resiliently held onto the stock amid the company’s soft patch, precipitated by slowing global economic growth that tempers the demand outlook.
Apple’s Key Q3 Numbers To Watch: The June quarter is seasonally slow for Apple, coming ahead of the back-to-school and holiday quarters. Customers also push back purchases in anticipation of the newest hardware products that typically roll out in late September or early October.
Cupertino entered the third quarter, having reported revenue declines for five quarters in the past six. The company is widely expected to report year-over-year growth in the top and bottom lines. Here are the consensus estimates and the prior-period numbers:
| Q3’24 Consensus* | Q3’23 | Q2’24 | |
| Revenue | $84.53B | $81.80B | $90.75B |
| Non-GAAP EPS | $1.35 | $1.26 | $1.53 |
| Gross margin | N/A | 44.26% | 46.58% |
Wedbush’s Daniel Ives said he expects mostly in-line headline numbers for the June quarter. “The Street is viewing this June quarter as just the warm-up to the main historical event for Cupertino which is the AI-driven supercycle beginning with iPhone 16 set to launch in mid-September,” he said
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Apple’s Key Businesses – What To Expect: The flagship iPhone contributes a little over 50% to Apple’s top line. Estimates by market researcher Canalys show that Apple shipped 45.6 million units in the June quarter, marking a 6% year-over-year growth. This was among the slowest growth rate among the other major global smartphone manufacturers, next only to Samsung.
Most Chinese makers reported a double-digit growth rate, led by Xiaomi Corporation XIACF. Apple’s smartphone market share slipped a percentage point year-over-year. The product mix assumes importance as it would decide the fate of revenue contribution from the product.
The PC market survey by IDC bodes well for Apple’s Mac shipments. The tech giant reported the fastest year-over-year growth among major manufacturers and was the fourth biggest maker, shipping 4.4 million units during the quarter. Apple’s PC shipments climbed 20.8% year-over-year compared to 3.7% for market leader Lenovo, 1.8% for HP and a negative 2.4% for Dell.
Ives expects the Services business to outdo expectations.
Look Ahead: The consensus estimates for Apple’s September quarter and full year are as follows:
| Q4 Consensus | Change (Y-o-Y) | FY24 Consensus | Y-o-Y Change | |
| EPS | $1.56 | +6.85% | $6.62 | +8.00% |
| Revenue | $93.39B | +4.4% | $387.96B | +1.22% |
Ives is very bullish about Apple’s long-term. “In our view, the renaissance of growth coming to Apple is still very underestimated by the Street and we see a $4 trillion market cap for Cupertino in 2025,” he said.
Wedbush has an Outperform rating and a $275 price target for the stock.
Recently, Morgan Stanley’s Erik Woodring named Apple the firm’s Top Pick and raised the price target for the stock from $216 to $273. The analyst expects Apple Intelligence to benefit more than just iPhone shipments, given users will need to buy an iPhone 15 Pro/Pro Max or newer models to use Apple Intelligence. This, according to the analyst, will positively influence the product mix and nudge ASPs.
Apple Stock: For the year-to-date period, Apple stock has added over 15.50%, comparable with the SPDR S&P 500 ETF Trust’s SPY 16.62% gain and Invesco QQQ Trust’s QQQ 15.37% advance.
In premarket, the stock rose 1% to $224.29, according to Benzinga Pro data.
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