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Apple. One bad news is not a disaster yet

Apple. One bad news is not a disaster yet

8 February 2023

Technology giant Apple has published financial results for the first quarter of fiscal year 2023. It was the first release in several years that made even optimists think. But, on the other hand, the year was not the easiest – and this gives hope for stabilization as the economic background evens out.

To begin with, we note that the market always relies on Wall Street consensus forecasts. There is an opinion that this reporting season, expectations were underestimated by both the companies themselves and economists – in order not to get upset once again and not trigger the exchange market. Apple was balancing between two fires here. In some cases, its results fell short of expectations, but records were updated in some issues. So:

  • revenue of $117.1 billion (-5.5% YoY) with a forecast of $121.1 billion;
  • net profit of $29.98 billion (-13.4% YoY);
  • EPS of $1.88 per share vs. forecast of $1.98;
  • operating profit of $36 billion (-13.2% YoY);
  • the services segment brought in $20.8 billion, which is a record level.

On the one hand, the company was helped by the increase in prices for services. Apple Music service has become more expensive by $1, Apple TV+ – by $2. Considering the number of users, this leveled the situation.

On the other hand, the negative was the story with China, which was constantly being quarantined. This applies to both production and demand. The Chinese conjuncture will also have an impact on the current quarter, but steps to diversify risks have already been taken and are about to give results – the company has partially moved production and is working on debugging supply chains.

If you look at sales by segment, they fell for smartphones, home gadgets and computers. At the same time, buyers were interested in iPads and alternative services – subscriptions and services. Most likely, everything will be exactly the same this quarter, but the iPhone may stabilize slightly in sales.

The consensus forecast for Apple shares for the year is $170. From the maximum, the securities fell by only 16%, which looks like a very acceptable level against the background of the rest of the market.

The MACD indicator is growing in a positive area and gives a clear buy signal. The Stochastic oscillator stays in the overbought zone and also signals a purchase.

8 February 2023
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