Apple (AAPL) Q4 2023 Earnings Preview

Apple AAPL Q4 2023 Earnings Preview

Apple Inc. (NASDAQ: AAPL) will report fiscal Q4 2023 results on Thursday, November 2, 2023. Here are the key numbers that we’re watching.

Figure 1: Apple – consensus expectations for Q4, past earnings surprises, revisions, and CAGR

Apple Earnings Preview

Source: Visible Alpha consensus (October 30, 2023). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Apple Q4 Earnings Preview

According to Visible Alpha consensus, total revenues expected for Q4 have come down from the beginning of the year, from $95.4 billion to $89.5 billion, driven by decreased optimism about Apple’s new iPhone. Since August, total expected iPhone unit sales have come down from 52 million to 50 million, driven by debate among analysts about the performance of the new iPhone. Expected Q4 iPhone units range from 45.5 million to 54.5 million, with most of the 9 million unit difference explained by a 7 million unit variance in estimates for the iPhone 15 specifically, ranging from 19 million to 26 million units.

While iPhone sentiment has come down, expectations for the high-margin Services segment and for total operating profit have remained consistent all year. Gross margin for the Services segment is over 70%, significantly higher than the 36% gross margin for Products. It will be interesting to hear what the Company says in the earnings release about growth in Services and if this is enough to offset any sluggishness in iPhone sales.

The stock has traded down -12% (as of the October 27 market close) since last quarter’s July release, but is up nearly 30% year to date. Could the Q4 release provide the next positive catalyst for the stock?

Figure 2: Apple consensus estimates

Apple Consensus EstimatesSource: Visible Alpha consensus (October 30, 2023). Stock price data courtesy of FactSet. Apple’s current stock price is as of the market close on October 27, 2023.


About Melissa Otto, CFA

Melissa is Head of TMT Research at Visible Alpha. She spent 20+ years as an equity analyst and portfolio manager. At TIAA/Nuveen, Melissa specialized in covering global technology and consumer stocks and the Pan-Asia region. She also managed one of Fidelity's equity research teams as a director of research. In addition to her equity investing career, Melissa worked directly with software engineering teams at Bloomberg, Microsoft, and MSCI building cloud-based solutions to centralize and aggregate critical investment data for investors. Melissa studied Japanese at Harvard University, received her MA in economics from Brandeis University and MS degree from the University of Pennsylvania, and is a CFA charterholder. She is certified in Azure Fundamentals and Agile Project Management.