(News Bulletin 247) – The Apple group published a decline in its turnover in the fourth quarter of its 2022-2023 financial year, ended at the end of September, which turned out to be higher than expectations, as was its profit. But revenues disappointed in China and Chief Financial Officer Luca Maestri indicated that Apple expected stable revenues in the current quarter.

Investors were waiting for Apple at the turn and were clearly watching for a misstep. Dan Ives, a well-known Wedbush analyst in charge of tech, noted that a general “negative” feeling had built up on the market ahead of the communication of the group’s results to Apple on Thursday evening.

Apple seems to have finally given the information that the “bears” (investors who bet on a decline in the stock) were waiting for. After the publication of the results for the fourth quarter of the group’s 2022-2023 fiscal year (which ran from July to September), Apple shares dropped 3.4% in post-market trading on Wall Street, this which amounts to wiping out more than $90 billion in market capitalization.

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China disappoints

The company reported revenues of $89.5 billion, down 0.7% year-on-year. This figure nevertheless remains above expectations, since analysts expected $89.28 billion, according to a consensus cited by CNBC.

iPhone sales fell 2.8% year-on-year to $43.805 billion, just in line with expectations ($43.81 billion). Remember that the group only launched the iPhone 15 – its new smartphone which seems to bring relatively few innovations – in mid-September, and thus only benefits from a limited impact from this news. product line.

Conversely, Apple’s services division (App Store, Apple Music, Apple TV, Arcade, or even the license that Google pays to be the default search engine on iPhones) reached a record level of revenue, at 22 .3 billion dollars, showing growth of 16.2% year-on-year.

Apple’s earnings per share also exceeded expectations, coming in at $1.46 when the market was expecting $1.39.

However, the company’s revenues in China were clearly disappointing, reaching $15.08 billion, which represents a drop of 2.5% over one year. However, according to Bloomberg, analysts expected revenues of $17 billion in this region.

China, which accounts for 17% of Apple’s revenue, has been a market concern since September, after several administrations, according to media reports, banned civil servants from using iPhones or foreign-branded phones at work. . Although the impact of such measures may be limited on Apple’s sales, investors have been nervous and the stock has fallen in several sessions.

Tim Cook, however, wanted to be reassuring, declaring that Apple had probably succeeded in gaining market share in China with its iPhones and declaring himself “optimistic” for this market.

Luca Maestri showers the market

Above all, Apple has wowed investors with its prospects. The Apple company no longer gives quantified objectives from one quarter to the next since the pandemic. But its financial director, Luca Maestri, provides analysts with the main guidelines.

However, for the quarter which will end in December, the holiday season and therefore the most important for Apple, the manager explained that the company’s revenues should be “similar” to those of last year. However, analysts were hoping for growth of 5%, according to Bloomberg.

Luca Maestri recalled that in the same quarter of last year (i.e. from October to December 2022), an additional week was added to the calendar (14 compared to 13) with a positive impact of 7 percentage points on revenues. . Which obviously penalizes Apple in terms of the basis of comparison. He also specified that currency effects should subtract one point from growth.

The CFO, however, indicated that the company expects its iPhone sales to grow in the current quarter on “an absolute basis.” It is actually iPads and wearable accessories, such as Apple Watches, which are expected to drag down the company’s revenues.

On X (ex-Twitter), Dan Ives, analyst at Wedbush, prefers to see the glass half full following this publication. The specialist reiterated his price target on Apple at $240, which gives the stock a 40% potential.

“For Apple, we are primarily interested in iPhone growth, services revenue, gross margins (well above those expected by Wall Street) and iPhone growth in China, which seems much better than feared, as well as positive anecdotal comments from Tim Cook. “There’s a lot of noise about iPad and Mac weakness for the December quarter.” said the analyst on X.