Goldman Sachs expects Apple to post an earnings beat
Goldman Sachs analysts anticipate Apple Inc. (NASDAQ:AAPL) will surpass earnings expectations for the third quarter of fiscal 2024.
They project Apple will report revenue of $85.1 billion, a 4% year-over-year increase, and earnings per share (EPS) of $1.36, compared to the FactSet consensus of $1.33.
Goldman Sachs expects iPhone revenue to decline by 5% year-over-year to $37.8 billion, driven by price discounting efforts to maintain clean channel inventories.
However, the investment bank believes the decline in iPhone revenue will be offset by double-digit growth in other segments.
The analysts forecast iPad revenue will rise by 23% year-over-year due to new iPad models launched in May, including the iPad Air with M2 and iPad Pro with M4. Mac revenue is expected to increase by 13% year-over-year, thanks to recent launches like the MacBook Air 13” and 15” with M3.
The Services segment is predicted to grow by 15% year-over-year, driven by price increases and strong App Store spending, which is up 13% according to Sensor Tower.
Meanwhile, the Wearables, Home, and Accessories category is expected to see a modest 2% year-over-year decline, although accessories tied to new iPad and MacBook launches should provide some support.
Looking ahead, Goldman Sachs sees a path for Apple path to achieve $9-$10 EPS in fiscal 2026/27, driven by increased iPhone shipments, new product innovations, and a shift towards premium iPhone models.
They forecast iPhone shipments to reach 230 million in fiscal 2024, 240 million in fiscal 2025, and 256 million in fiscal 2026.
For the fourth quarter of fiscal 2024, Goldman Sachs projects EPS of $1.55 and revenue of $93.6 billion, aligning with the Visible Alpha consensus.
They expect Apple to guide for mid-single-digit year-over-year revenue growth, with declines in iPhone revenue offset by growth in iPad, Mac, and Wearables, along with continued strong growth in Services.
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