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Analysts say that they expect Apple to post its first year-on-year revenue decline since 2019 when the company shares its earnings on Thursday.
The last time Apple posted earnings that represented an annual decline was back in the March quarter of 2019, with analysts of the belief that the company’s inability to build its best iPhones quickly enough was a major factor.
Apple’s 2022 came to a close amid ongoing production disruption at a key Foxconn plant in China — the only plant capable of building the high-end iPhone 14 Pro and iPhone 14 Pro Max. Things got so bad that Apple warned investors that iPhone availability would be impacted.
“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple said in a statement (opens in new tab) in November 2022. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”
No iPhones, no sales
CNBC (opens in new tab) reports that some analysts expect Apple to report just over $121 billion in revenue for the December quarter, a figure that would be a decline over the $123.9 billion posted in the same quarter the year prior.
However, some analysts believe that this is a temporary issue and that Apple’s value to customers will drive it onward and upward.
“While the state of consumer demand remains a near-term concern, we believe the underlying drivers of Apple’s model – a growing installed base and spend per user – remain intact, and that the strength/stability of Apple’s ecosystem remains undervalued,” Morgan Stanley analyst Erik Woodring wrote in a note earlier this month and seen by CNBC.
Apple, for its part, continues to refuse to give guidance on earnings citing the pandemic and ongoing economic uncertainty.
It isn’t all bad news for Apple, however. Analysts expect Apple’s Services revenue to grow almost 6% to around $20.67 billion for the December quarter.
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