Apple (AAPL) is gearing up to release its first-quarter fiscal 2024 results on Feb 1.
Expectations for Q1 Earnings
The company anticipates the first-quarter revenues to be in line with the figure reported in the year-ago quarter, with an estimated growth of 0.40% year over year, amounting to $117.62 billion. Earnings per share are projected to increase by 11.17% from the year-ago quarter, currently standing at $2.09 per share. Apple’s earnings have outperformed the Zacks Consensus Estimate in three of the trailing four quarters, with an average earnings surprise of 3.47%.
Key Revenue Drivers: iPhone and Services
Apple’s financial performance is heavily reliant on iPhone sales, which accounted for 48.9% of net sales in the last reported quarter. The company expects growth in iPhone revenues, primarily driven by new models. Additionally, the Services segment is expected to display healthy growth, fueled by the increasing popularity of the App Store and a growing base of paid subscribers.
The iPhone Impact
Apple’s predicted iPhone net sales for the first quarter are around $66.68 billion, reflecting a 1.4% year-over-year growth. While Apple’s market share stood at 24% in the global smartphone market, the company faced challenges in the Chinese market due to strong competition and governmental restrictions.
Services Growth
The Services segment, which contributed 24.9% of sales in the last quarter, is estimated to achieve a 9.1% year-over-year growth in the first quarter. The segment has been driven by an expanding paid subscriber base and the success of offerings like Apple TV+, Apple Arcade, and Apple News+. Despite its increased viewership, Apple TV+ is still striving to gain a significant market share compared to other major players like Amazon Prime Video and Netflix.
Apple currently holds a Zacks Rank #3 (Hold).
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