Earnings Report Preview | Can Apple deliver on optimistic expectations in Q4?

According to Dolphin Research APP, Apple (AAPL.US) will announce its fourth-quarter earnings on November 2nd (Thursday). The market expects Apple's Q4 revenue to be $89.31 billion, significantly higher than the previous quarter's $81.8 billion; earnings per share are expected to be $1.39, also higher than the previous quarter's $1.26. The market is focusing on Apple's earnings report. Apple has met or exceeded expectations for revenue and earnings per share in three out of the past four quarters, but this time the expectations are even higher, despite concerns from analysts about international sales of new and existing iPhones. Higher expectations mean that for Apple's stock price to rise, it must deliver better results. Apple's stock price has risen 30% so far this year. Morningstar stated that the most important part of Apple's story so far is still the iPhone, so this earnings report will provide the market with the first insight into the demand for the iPhone 15 series. Apple has not provided official revenue guidance for several quarters, but investors will be paying attention to more clues about iPhone revenue and sales information from the end of September to October. Artificial intelligence (AI) remains a focus of technology company earnings reports. Morningstar expects Apple to be keen on promoting its AI technology in existing products but may keep its future AI ambitions low-key. Investors may still seek more detailed information about Apple's efforts in the field of AI. Services are Apple's next meaningful growth driver. Morningstar still sees the performance of services as a lagging indicator because many of these services are combined with earlier purchases of Apple hardware. However, this is not necessarily a bad thing, as these services create stickiness for the iOS ecosystem, which is the foundation of Apple's wide moat. In addition to iPhone revenue, investors will also be interested in any comments about services, especially macroeconomic issues and the financial condition of global consumers. Morningstar estimates the fair value of Apple's stock to be $150 per share. Morningstar expects Apple's total revenue for the 2023 fiscal year to decline by 2%, as growth in services revenue and flat wearable device revenue will be offset by a slight decline in iPhone and iPad revenue and a sharp decline in Mac revenue.