Apple,Inc., an American multinational technology company that specializes in the design, manufacture, and sale of smartphones (iPhone), personal computers (Mac), tablets (iPad), wearables and accessories (Apple Watch, AirPods, Apple Beats), TVs (Apple TV) and other varieties of related services (iCloud, digital content stores, streaming, licensing services), shall release its Q3 2024 earnings result on 1st August (Thursday), after market close. What lies ahead for this most valuable conglomerate with market capitalization over $3.3 ttrillion?
In Q2 2024, Apple Inc. reported a revenue of $90.75B, down -24.1% from the previous quarter, and down -4.3% from the same period last year. The slump in sales revenue was mainly dragged by a slide in hardware sales, albeit the rapidly growing services revenue.
As seen from the financial statement above, iPhone sales revenue has dropped over -10% (y/y) to $45.96B, hit by weak demand globally including the Greater China (Following news of AI-supercharged iPhone 16 with upgraded operating system to be launched in September, some analysts expected the company to reach $4T in market cap); iPad sales revenue down -16.7% (y/y) to $5.6B, following an absence of innovation since 2022 (Nevertheless, a redesigned iPad models in May could probably revive demand in the product line); Wearable, Home and Accessories sales revenue down -9.6% (y/y) to $7.9B; Mac sales revenue remain flat, at $7.5B; Services revenue, on the other hand, up over 14% (y/y) to all-time record, at $23.9B. In the near term, the management expected to see double-digit growth in services segment. In addition, the company reported a decline of -2.2% (y/y) in net income, to $23.6B.
Pessimism persists for the coming quarter. According to projection by the S&P Global Market Intelligence, sales revenue of Apple Inc. is expected to hit $84.1B, down -7.3% from the previous quarter, but up 2.8% from the same period last year. Operating profit and net income are estimated at $24.4B and $20.5B (was $27.9B and $23.6B in the previous quarter). As a result, operating margin is projected to down -1.77% (q/q) to 28.97%, whereas net margin is expected to down -1.64% (q/q) to 24.40%.
Apple: EPS. Source: Market Screener
EPS is estimated to hit $1.33, down 20 cents from previous quarter $1.53. It was $1.26 in Q3 2023.
Technical Analysis:
#Apple, Weekly: #Apple share price has retraced recently from ATH $237.15 and FE 100% $239. The FE 61.8%, or $211 serves as the nearest support, followed by $197 and dynamic support 100-week SMA. On the other hand, $239 serves as the nearest resistance, in which a break above this level shall indicate trend continuation, with the next focus on $284 (FE 161.8%). MACD indicator remains in positive territory, with its fast line at value 11.243.
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Larince Zhang
Market Analyst
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