After the consumer electronics giant delivered better-than-expected results for the September quarter Apple (AAPL) warned of a slowdown for the December quarter. Still, Apple stock rose on Friday.
The Cupertino, Calif.-based company announced late Thursday that it earned $1.29 per share on sales of $90.1 billion for the fourth quarter of the fiscal year ended September 24. Year over year, Apple’s earnings rose 4% while revenue rose 8%. .
However, in a conference call with analysts, Chief Financial Officer Luca Maestri forecast slower revenue growth for the holiday quarter.
“Overall, we believe year-over-year revenue performance across the company will slow in the December quarter compared to the September quarter,” said Maestri. He cited headwinds in exchange rates and an expected decline in Mac computer sales.
“On the Mac, alongside increasing FX headwinds, we have a very challenging comparison to last year which benefited from the launch and associated channel filling of our redesigned M1 (processor) MacBook Pro,” said Maestri. “As such, we expect Mac sales to be significantly lower year-over-year in the December quarter.”
Apple stock rises after report
Also, Apple expects the macroeconomic environment to weigh on growth in its services business, including digital advertising and games, he said.
In this morning’s stock market trading, Apple shares are up 7.7% to 155.95.
During the earnings call, Chief Executive Tim Cook pointed out that Apple is experiencing supply shortages on several new products. He said the company hasn’t been able to produce enough iPhone 14 Pro models and Apple Watch Ultra wearables to meet demand.
Labeled Apple a “tech standout.”
Wedbush Securities analyst Daniel Ives called Apple “a standout technology in a dark economic and currency storm.” In a report, Ives reiterated his outperform rating on Apple stock but lowered his 12-month price target to 200 from 220.
Apple’s guidance for the December quarter was vague enough to “keep the skeptics going,” Brandon Nispel, an analyst at KeyBanc Capital Markets, said in a note to clients. He maintained his overweight stance on Apple stock but lowered his price target to 177 from 185.
Evercore ISI analyst Amit Daryanani said he expects Apple’s revenue to grow 5% in the December quarter.
“Apple remains uniquely positioned to sustain mid- to high-single-digit revenue and low- to mid-teens EPS growth on a multi-year basis,” Daryanani said in a note to customers. He rates Apple stock as above average with a target price of 190.
AAPL stock receives price target cuts
Barclays analyst Tim Long was more cautious in the holiday quarter. He now anticipates 3% revenue growth for Apple in the December quarter. Long rates Apple stock as Equal or Neutral with a price target of 156.
At least six Wall Street analysts lowered their price targets for Apple stock following the company’s Q4 report.
Apple stock has consolidated over the past 43 weeks with a buy point of 183.04, according to IBD MarketSmith charts. It has an IBD Composite Rating of 76 out of 99, says IBD Stock Checkup.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories about consumer technology, software and semiconductor stocks.
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