After delivering better-than-expected results for the September quarter, the consumer electronics giant Apple ( AAPL ) warned of a slowdown ahead in the December quarter. Still, Apple stock rose on Friday.
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of Cupertino, Calif. The company reported late Thursday that it earned $1.29 a share on sales of $90.1 billion in the fiscal fourth quarter in September. .
However, in a conference call with analysts, Chief Financial Officer Luca Mastri predicted slower sales growth for the holiday quarter.
“Overall, we believe that the company’s overall annual revenue performance will decrease in the December quarter compared to the September quarter,” said Maestri. They cited a rise in foreign exchange headwinds and a decline in sales of Mac computers.
“In addition to adding an FX header to the Mac, we have a more challenging than last year, which had the advantage of launching the newly designed MacBook Pro with an M1 (processor) and filling the associated channel,” Maestri said. “Therefore, we expect Mac revenue to decline significantly year-over-year in the December quarter.”
Apple stock rose after the report
Apple also expects the macroeconomic environment to put pressure on its services business, including digital advertising and games, he said.
Today on the stock market, Apple shares rose by 7.6% to close at 155.74.
On the earnings call, CEO Tim Cook said that Apple has limited supply on several new products. They said the company was unable to make enough iPhone 14 Pro models and Apple’s White Ultra wearables to meet demand.
Apple is called a ‘tech standout’
Wedbush Securities analyst Daniel Ives called Apple “a tech standout in a bleak economic and FX storm.” In the report, Ives reiterated his outperform rating on Apple stock but lowered his 12-month price target to 200 from 220.
KeyBank Capital Markets analyst Brandon Nispel said in a note to clients that Apple’s guidance for the December quarter was vague enough to “keep the skeptics around.” He lowered his price target to 177 from 185, though he kept his overweight rating on Apple stock.
Evercore ISI analyst Amit Darianani expects Apple’s revenue to grow 5 percent in the December quarter.
“Apple is uniquely positioned to sustain mid- to high-single-digit sales and low- to mid-teens EPS growth for several years,” Darinani said in a note to clients. With a price target of 190, he rated Apple stock as an outperformer.
AAPL stock gets price-target cuts
Barclays analyst Tim Long was more cautious on the holiday quarter. It is now modeling 3% sales growth for Apple in the December quarter. Long rates Apple stocks at equal weight or neutral, with a price target of 156.
At least six Wall Street analysts cut their price targets on Apple stock after the company’s fiscal Q4 report.
According to IBD MarketSmith charts, Apple stock has been consolidating over the past 43 weeks with a buy point of 183.04. It has an IBD Composite Rating of 76 out of 99, according to IBD Stock Checkup.
Follow Patrick Seitz on Twitter @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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