apple-to-report-q3-earnings-as-investors-look-for-hints-of-consumer-spending-slowdown

Apple to report Q3 earnings as investors look for hints of consumer spending slowdown

Apple (AAPL) will release its Q3 earnings on Thursday, providing investors and analysts with deeper insight into consumer spending amid the highest inflation in 40 years.

Here are the consensus expectations for the report, as compiled by Bloomberg, compared to how Apple performed in the same period last year.

  • Revenue: $82.7 billion expected versus $81.4 billion in Q3 2021

  • Earnings per share: $1.16 expected versus $1.30 in Q3 2021

  • iPhone revenue: $38.9 billion expected versus $39.5 billion in Q3 2021

  • iPad revenue: $6.9 billion expected versus $7.3 billion in Q3 2021

  • Mac revenue: $8.4 billion expected versus $8.2 billion in Q3 2021

  • Wearables revenue: $8.7 billion expected versus $8.7 billion in Q3 2021

  • Services revenue: $19.7 billion expected versus $17.4 billion in Q1 2021

Wall Street analysts are calling for year-over-year declines in iPhone, iPad, and wearables revenue for the quarter, though that shouldn’t come as a shock. In Q2, Apple CFO Luca Maestri warned that Apple will take a $4 billion to $8 billion hit as COVID lockdowns in China cut into the company’s ability to meet consumer demand for its products.

SUN VALLEY, IDAHO - JULY 08: Tim Cook, CEO of Apple, attends the Allen & Company Sun Valley Conference on July 08, 2022 in Sun Valley, Idaho. The world's most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort this week for the exclusive conference. (Photo by Kevin Dietsch/Getty Images)

SUN VALLEY, IDAHO – JULY 08: Tim Cook, CEO of Apple, attends the Allen & Company Sun Valley Conference on July 08, 2022 in Sun Valley, Idaho. The world’s most wealthy and powerful businesspeople from the media, finance, and technology will converge at the Sun Valley Resort this week for the exclusive conference. (Photo by Kevin Dietsch/Getty Images)

What’s more, Maestri said that Apple’s growth will face a 4.5% headwind as a result of foreign exchange fluctuations and the company’s decision to cease sales in Russia.

But according to Morgan Stanley, this is all short-term trouble for the iPhone maker. In a note, Erik W. Woodring indicates that Apple’s services business could help push the tech titan’s market cap over the $3 trillion market again.

Apple first crossed $3 trillion in January, but has since fallen to roughly $2.5 trillion as it navigates the tumult among tech stocks.

Apple is widely expected to launch its iPhone 14 line along with its Apple Watch Series 8 later this fall. And while that won’t have much impact on the company’s Q4 earnings since the products are announced just a few weeks before the quarter ends, it should boost its Q1 2023 performance.

Apple is also said to be preparing to enter the AR/VR space with its own headset that will likely launch sometime in 2023. That could serve as the next major product for the company and open up broader opportunities for services and content sales.

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Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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