AAPL Q2 2023 earnings expected to be down, but stock buybacks to ...

AAPL Q2 2023 earnings will be announced at 2 p.m. PDT/5 p.m. EDT today, and while the company hasn’t offered specific guidance, it has warned that it expects a year-on-year decline of around 5%.

Wall Street agrees, with analysts expecting a drop from last year’s record $97.3B – but Apple is expected to demonstrate its own continued confidence in the stock through a large buyback announcement …

Q2 2022 earnings

The seasonal nature of Apple’s sales makes year-on-year comparisons the only relevant metric. Last year’s results set a new revenue record, at $97.3B. This was 9% up year-on-year, and comfortably above analyst expectations.

iPad revenue was slightly down, while everything else was up:

• iPhone: $50.57 billion (Up 5.5% YOY)
• Mac: $10.43 billion (Up 14.3% YOY)
• iPad: $7.65 billion (Down 2.2% YOY)
• Wearables: $8.82 billion (Up 12.2% YOY)
• Services: $19.82 billion (Up 17.2% YOY)

AAPL Q2 2023 earnings warning

Apple’s fiscal Q1 earnings were down 8% year-on-year, and chief financial officer Luca Maestri warned that the company expected another decline this quarter.

Foreign exchange will continue to be a headwind, and we expect a negative year-over-year impact of five percentage points.

For services, we expect revenue to grow year over year while continuing to face macroeconomic headwinds in areas such as digital advertising and mobile gaming. For iPhone, we expect our March quarter year-over-year revenue performance to accelerate relative to the December quarter year-over-year revenue performance.

For Mac and iPad, we expect revenue for both product categories to decline double digits year over year because of challenging compares and macroeconomic headwinds

Analyst expectations

Analyst expectations are roughly in line with Apple’s own warning, with the consensus revenue estimate coming in at $92.96B.

They forecast earnings per share to be $1.43, against last year’s $1.52.

Looking further ahead, Wall Street is more optimistic, expecting a small return to growth in Q3.

Stock buybacks and dividends

CNBC expects Apple to reward investors for their patience, with an increased dividend.

The Cupertino company is also expected to demonstrate continued confidence in its own stock through around $90B of stock buybacks – around the same amount it spent last year, when the results were far rosier. Stock buybacks are where Apple uses its cash reserves to purchase its own shares. These shares are then cancelled, increasing the effective value of the remaining shares.

As always, we’ll let you know all the figures as soon as they are announced.

Photo: Jason Briscoe/Unsplash