Apple (AAPL) Q4 2024 Earnings Report

Apple reports fourth-quarter results after the bell on Thursday. It's the end of Apple's fiscal year and the first quarter of sales since the iPhone 16 launched in September.

According to the LSEG consensus estimates, the following can be expected:

• Earnings per share: $1.60
• revenue: $94.58 billion

The key point will be what Apple signals to investors about the December quarter, which represents the biggest seasonal sales period of the year. This will set the tone for the current iPhone sales cycle and whether it represents an opportunity for revenue growth through the introduction of Apple Intelligence.

Apple doesn't make official forecasts, but it typically offers projected data points on a call with analysts that show whether the company expects sales growth and how some of its product lines might perform – particularly the iPhone, which still accounts for much of the Apple's sales make up sales.

Without Apple's official guidance and sales, investors analyze surveys and shipping data on Apple's website to get a guide.

Some analysts suggest that the signs so far are “mixed.”

“To be clear, we have not heard of iPhone production cuts in our reviews, but after tracking iPhone 16 demand indicators for a month, we would characterize iPhone demand as mixed,” wrote Erik Woodring, analyst at Morgan Stanley, in an October note. 22.

Other analysts are waiting to see exactly when Apple Intelligence will increase sales. Apple Intelligence will be rolled out gradually over the next few months. It's now available in American English, but will also support German, Italian, Korean, Chinese, French, Japanese and Spanish next year, Apple says.

“While iPhone sales will be on everyone's mind in AAPL reports, the data streams suggest there is little reason to believe an upgrade cycle has begun,” DA Davidson analyst Gil Luria wrote in a note this week . “This is to be expected since Apple Intelligence features (the only reason to upgrade)
still need to be introduced on a significant scale.”

U.S. wireless carriers, including AT&T, Verizon and T-Mobile, also appeared unenthusiastic about an Apple Intelligence upgrade cycle.

“We are, of course, still waiting on the software release and whether or not that software release stimulates consumer interest,” AT&T CEO John Stankey said on an earnings call last week.

Sales in Greater China were one of the weakest parts of Apple's latest quarterly report, falling 6% amid increasing pressure from Chinese rivals.

“We believe Apple is still under pressure from Huawei despite the launch of a new iPhone, and we do not expect competition to ease any time soon,” Citi analyst Malif Atik wrote in a note this week.

But research firm Counterpoint Research told CNBC in October that iPhone sales, particularly of the cheaper devices, were strong in China.

“We are seeing strong sales of the iPhone 16 series in China, up 20% compared to the iPhone 15 series in the first three weeks of sales last year,” a Counterpoint representative said.

Investors will also look closely at Apple's wearables category, which includes the Apple Watch and AirPods headphones. Both product lines saw new models hit shelves during the quarter, including Apple Watches with larger screens and low-end AirPods with noise cancellation.

The new products could reverse the trend that has seen Apple's wearables sales decline year-over-year for four consecutive quarters.

Overall, analysts surveyed by LSEG expect annual sales growth of around 5.6% to around $95 billion.

This is consistent with Apple's announcements in August. Apple also said at the time that its services division — the company's broad, high-margin division that includes everything from Major League Soccer subscriptions to Google search offerings and extended iPhone warranties — would grow about 14% during the quarter and so that growth will remain stable.

Thursday's report is also likely to be the last with CFO Luca Maestri. Apple announced in August that Maestri would step down on Jan. 1 and be replaced by longtime lieutenant Kevan Parekh. However, Maestri will not be leaving Apple and will remain in charge of some teams focused on IT, real estate and security.

REGARD: The launch of Apple Intelligence could be a game-changer, says Daniel Newman, CEO of Futurum Group