Anticipation is also growing for Apple’s launch of a major product category
Apple‘s next earnings report is now just two weeks away, and Wall Street has begun to adjust its forecasts for how the numbers will turn out.
As the stock continues to flirt with the $3 trillion valuation mark, there is growing confidence that Apple can both report better-than-expected results for the December quarter results and offer strong guidance for the March quarter. And anticipation is growing for Apple’s launch of a major product category – glasses and headsets for augmented and virtual reality.
J.P. Morgan analyst Samik Chatterjee said in a research note Thursday that the shares have rallied about 15% since Apple reported September quarter results, in a period in which the S&P 500 gained only 3%.
He says the rally reflects expectations of strong earnings, driven largely by a better-than-expected iPhone 13 sales cycle. Chatterjee’s view is that December quarter results will modestly beat expectations despite problems in the supply chain.
For the December quarter, Chatterjee sees revenue of $119 billion and profits of $1.94 a share, slightly ahead of the Wall Street consensus call for $118 billion and $1.88 a share.
The key to how the stock will perform after the results will be management’s financial forecasts, he said. His March quarter estimates call for revenue of $95 billion and profits of $1.50 a share, well above the consensus call for $90 billion and $1.33.
For the September 2022 fiscal year, his model calls for $382 billion in revenue and profits of $5.95 a share, while the consensus is $382 billion and $5.73 a share.
Chatterjee’s call is slightly complicated by the fact that Apple stopped providing detailed quarterly guidance at the start of the pandemic and hasn’t resumed the practice.
On the most recent earnings conference call, CFO Luca Maestri cautioned that the company would see a bigger impact from supply constraints in the December quarter than in the September quarter. He also said that the company was expecting ‘very solid’ growth in the quarter, with year-over-year increases in all areas other than iPad, where he anticipated a sales impact from supply constraints.
