Analysts expect Apple's Q3 earnings report to display a positive trend despite the tech company struggling with a consumer electronics slump.
The company's third fiscal quarter results are set to be released on Aug. 3, accompanied by the usual call with analysts. The tech company confirmed that it would release its quarterly results on Aug. 3 back on July 10.
Apple's Q3 Earnings Report
While the company has declined to offer firm numbers in its forward-looking guidance since 2020, Apple CFO Luca Maestri offered up some details to consider during the second quarter earnings call.
According to the official, the company's revenue for the quarter is expected to show a similar trend on a year-on-year basis with Q2, as long as the macroeconomic outlook does not worsen. Additionally, they predict foreign exchange to remain a headwind at 400 basis points. However, Services should continue to see similar growth to the March quarter, as per Apple Insider.
The Apple CFO also said that the gross margin for the company's third quarter should rest at around 44% to 44.5% as operating costs range from $13.6 billion to $13.8 billion. She noted that the Gross Margin can also be attributed to the flat foreign exchange rate.
Usually, the third quarter is seen as the lowest of the tech company's annual cycle of results, which shows it typically earns less revenue than all of the quarters in the year. Despite this, the company does continue to see improvements in the quarter's results compared to the same numbers seen in the report during the prior year.
During the 2022 Q3 earnings reports, Apple experienced a 2% year-on-year increase in revenue, which rose to $83 billion. It came at a time when iPhone revenue went up slightly to $40.6 billion, iPad revenue slightly went down to $7.22 billion, and Mac revenue dropped to $7.38 billion.
Apple's expected favorable Q3 numbers are seen as a result of the higher demand for the iPhone product in China. The Asian nation is the largest smartphone market globally. During the second quarter, one report noted that 10.4 million iPhone units were shipped to mainland China from April through June, according to Phone Arena.
Consumer Electronics Slump
That number was only one million short compared to the number of handsets shipped by co-leaders in the industry, Oppo and Vivo. By the end of the second quarter, Apple's market share in China was at 16%, which was a little bit behind the 18 $ % that the other two tech companies owned.
The scheduled Apple Q3 earnings report comes as specialty glass maker Corning forecasted third-quarter core sales below Wall Street estimates on Tuesday. This comes as the company struggles with the ongoing slump in the consumer electronics market.
The company expects core sales of roughly $3.5 billion in the three months ending in September, compared to analysts' estimates of roughly $3.7 billion. Shares of Corning, whose Gorilla glass for smartphones is widely used by leading companies such as Apple and Samsung, were down nearly 1.5% before the bell, said Reuters.
