What To Expect From Apple’s Q3 Results?

Apple
AAPL
is expected to publish its Q3 FY’23 results in early August, reporting on another quarter that is likely to see Apple’s key computing products face sluggish demand. We expect earnings to stand at about $1.07 per share, slightly below consensus estimates. On the other hand, we expect revenues to come in about $74 billion, marking a decline of about 11% versus last year and marginally ahead of consensus estimates. So what are some of the trends that are likely to drive Apple’s results for the quarter? See our analysis on Apple Earnings Preview for a closer look at what to expect when Apple publishes earnings.

While Q3 is typically a seasonally weak quarter for Apple, we expect sales of products such as the Mac and iPad to also decline year-over-year, as the remote working trend eases and the broader PC and tablet markets cool. For perspective, over Q2 FY’23, Apple’s Mac sales declined by about 31% year-over-year. However, sales of the iPhone could prove a bit more resilient, given the traction that Apple is seeing in markets such as India, Indonesia, and Turkey where installment plans and trade-in programs are helping drive demand. Apple’s digital services business should partly help Apple ride out the lull in its hardware business driven by higher sales at the AppStore and improving the uptake of other subscription services. However, growth rates are likely to remain below the levels seen last year. That said, it is likely that Apple will continue to expand its gross margins for the quarter driven by a higher mix of service sales, more premium products, and also due to some cost savings.