Yahoo Finance Will Solid Mac Sales & Services Aid Apple's (AAPL) Q2 Earnings?
Apple’s AAPL second-quarter fiscal 2024 results, to be reported on May 2, are expected to reflect the benefits of an improving PC market, as well as steady growth in the Services business.
The PC segment witnessed growth in the first quarter of calendar 2024 after two years of decline. Per IDC’s latest report, 59.8 million PCs were shipped, up 1.5% from the year-ago period. Lenovo LNVGY topped the shipment list, trailed by HP HPQ and Dell Technologies DELL, in terms of market share.
Lenovo, HP, Dell and Apple had 23%, 20.1%, 15.5% and 8.1%, respectively. Moreover, in terms of shipment, Lenovo and HP witnessed growth of 7.8% and 0.2%, respectively, while Dell Technologies lost 2.2%. Apple witnessed 14.6% growth, the strongest on the list.
Apple’s portfolio benefited from the availability of an updated MacBook Pro 14 inch, MacBook Pro 16 inch and iMac.
However, stiff competition is expected to hurt Mac revenues. Our model estimates for fiscal second quarter Mac revenues are pegged at $6.03 billion, indicating a 15.9% year-over-year decline.
Apple Inc. Revenue (TTM)
Apple Inc. revenue-ttm | Apple Inc. Quote
Click here to know how Apple’s overall fiscal second-quarter results are likely to be.
Steady Services Growth to Aid Top Line
Apple’s Services business is expected to benefit from increasing users of the App Store and growing viewership of Apple TV+. Moreover, the growing adoption of Apple Music, Apple Arcade, Apple News+ and Apple Card has been noteworthy.
Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. It accounted for 19.3% of sales in first-quarter fiscal 2024.
Apple had more than 1 billion paid subscribers across its Services portfolio at the end of the fiscal first quarter. This is expected to have increased in the to-be-reported quarter, thanks to the growing installed base of Apple’s devices, as well as the popularity of apps like Apple TV+.
Our model estimates for second-quarter fiscal 2024 Services revenues stands at $23.07 billion, indicating 10.3% year over year.
iPad & Wearables Sales to Decline
iPad and Wearables, Home & Accessories revenues are expected to have declined in the to-be-reported quarter.
Our model estimates for iPad revenues are pegged at $5.19 billion, indicating a 22.2% year-over-year decline.
Our model estimates Wearables, Home & Accessories revenues of $8.29 billion, suggesting a 5.4% year-over-year decline.
Apple currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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