After posting its fourth straight quarter of declining sales, Apple forecast flat sales for the holiday quarter. The news drove Apple stock lower on Friday.
The Cupertino, Calif.-based company late Thursday beat expectations for its fiscal fourth quarter ended Sept. 30 but disappointed with its lackluster guidance for the December quarter.
Apple earned $1.46 a share, up 13% year over year, on sales of $89.5 billion, down 1%, in its fiscal Q4. Analysts had expected earnings of $1.39 a share on sales of $89.3 billion.
Excluding foreign-exchange rate changes, Apple sales would have risen slightly in the September quarter. Foreign exchange had a negative impact of over 2 percentage points in the period, Chief Financial Officer Luca Maestri said on a conference call with analysts.
For the current quarter, Apple expects total company revenue to be "similar to last year," Maestri said. He noted that the December quarter this year will last the usual 13 weeks, whereas the December quarter a year ago spanned 14 weeks. Wall Street had been looking for 5% sales growth in the fiscal first quarter.
Apple expects iPhone sales to grow year over year in the holiday quarter, despite being supply constrained on the premium iPhone 15 Pro and Pro Max models, Maestri said.
Apple Stock Falls After Report
On the stock market today, Apple stock sank 0.5% to close at 176.65.
At least nine Wall Street firms cut their price targets on Apple stock after the report.
JPMorgan analyst Samik Chatterjee kept his overweight, or buy, rating on Apple stock but trimmed his price target to 225 from 230.
"Despite a resilient performance, the effects of the challenging macro were evident and were more profound on certain segments than imagined," Chatterjee said in a client note. That raises concerns about growth if macroeconomic effects continue, he said.
Barclays analyst Tim Long reiterated his equal weight, or neutral, rating on Apple stock and cut his price target to 161 from 166.
"We continue to see demand weakness across hardware categories echoed by order cuts and continued weak sell through, per our checks," Long said in a note to clients.
CEO Chats Up Apple Vision Pro
Chief Executive Tim Cook touted the company's upcoming mixed-reality headset on the analyst call. He described the Apple Vision Pro as a "magical product."
Software developers are hard at work making applications for the device, which is due to launch in early 2024, Cook said. Developers are creating some "truly incredible apps" for the headset, which marries virtual reality with augmented reality.
Cook said he's seen some of the apps being developed for Vision Pro and they include "some real blow-away kinds of things."
Apple stock has an IBD Composite Rating of 84 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
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