Apple to Leads Wall Street on Its Annual Scavenger Hunt

Apple Inc. is known for leading investors on an annual metaphorical scavenger hunt, and this trend is expected to commence later this week.

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On Thursday, Wall Street will be rewarded for paying attention to Apple's earnings call, even during its least exciting quarter, as it often contains hints about the more interesting period ahead. While Apple will discuss spring sales during the call, it is also anticipated to provide some sort of forecast for the current quarter, which frequently includes the initial sales of the next-generation iPhone model.

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An important question on many investors' minds is whether Apple's September quarter will indeed feature the iPhone 15 this time around. Recently, BofA Securities raised concerns that the iPhone 15's selling debut could be delayed by a few weeks due to production issues, potentially pushing sales to the start of the December quarter.

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The forthcoming earnings call will shed some light on Apple's forecast, although interpreting it has become more challenging in recent times. Prior to the pandemic, Apple used to share a numerical expectation for total revenue, allowing investors to gauge the expected iPhone arrival date. However, the company abandoned this traditional guidance during the pandemic and began offering hints about how revenue might compare to recent periods instead.

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While Wall Street may gain insights into Apple's plans for the next iPhone launch from the clues provided during the earnings call, the mystery may not hold significant weight in the long run. Even if the iPhone is not ready for sale by the end of September as it was last year, loyal customers may be willing to wait a few weeks to get their hands on the new device.

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According to Barclays analyst Tim Long, the hardware guidance "could miss Street estimates" due to potential iPhone 15 delays, but for investors with bullish expectations for the December quarter, this may not significantly impact the stock.

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Apart from iPhone-related factors, the September-quarter outlook will also be influenced by other aspects, with Wall Street closely monitoring Apple's commentary on overall smartphone demand and the market situation in China when the company reports its fiscal third-quarter results after Thursday's closing bell.

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While global smartphone demand recovery might not meet expectations, the premium market and Apple seem to be less affected, as noted by Deutsche Bank analyst Sidney Ho. Harsh Kumar of Piper Sandler also downplays concerns about iPhone resilience in China, stating that Apple's position in the country remains solid and any sales weakness in China could be balanced by strong sales momentum in India.

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According to analysts, Apple is expected to report $90.15 billion in sales for the September quarter, relatively unchanged from the same period last year. For the June quarter, revenue is projected to be $81.74 billion, down from $82.96 billion in the corresponding period a year earlier.

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In terms of hardware business, analysts estimate $70.06 billion in September-quarter revenue, down from $70.96 billion in the previous year. They also forecast $61.89 billion in June-quarter revenue, down from $63.36 billion.

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The consensus indicates an expected $44.55 billion in September-quarter iPhone revenue, up from $42.63 billion a year before. The June-quarter iPhone revenue forecast averages at $40.23 billion, down from $40.67 billion.

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