Everybody expects Apple earnings for fiscal Q220 to be less than stellar. Applel reports after market close next Thursday, but the quarter after that — Apple’s Q3 which ends in June — could be even worse, according to Bernstein analyst Toni Sacconaghi.
Two months ago, the company withdrew its revenue guidance, citing both the supply and demand effects of the Covid-19 pandemic, in particular on the iPhone. The company previously had been projecting revenue in the $63 billion to $67 billion range, and Street consensus has fallen at least $10 billion below that level. Bernstein analyst Toni Sacconaghi asserts in a research note Wednesday that the March quarter numbers basically don’t matter. He sees revenue of $57.9 billion and profits of $2.57 a share, which is above current consensus at $54.8 billion and $2.28 a share.
“It remains unclear what Apple will say for [the June quarter],” he writes. “Will they guide per usual, provide a wider-than-usual guidance range, or not guide altogether?” He adds: “We believe Apple won’t be facing the full brunt of coronavirus until [the June quarter], and yet consensus appears to be (bizarrely) modeling better-than-normal seasonality.”
Sacconaghi is modeling June quarter revenue of $40.9 billion, which is more than $10 billion below the Street consensus at $51.4 billion—that would be a year-over-year decline of 24%.
MacDailyNews Take: Of course, it’ll be rocky for Apple for the next few quarters thanks to COVID-19, but Apple’s Services may surprise while also continuing to bring in revenue regardless of whether retail stores are open or not. Work from home likely helps Apple’s online sales of Macs, iPads, iPhones, AirPods, etc. – things one needs to effectively work from home for weeks/months. Next Thursday’s Q220 earnings report will be interesting, and updates on the company’s capital return program (buybacks executed, repurchase plan, and dividend changes) will be a highlight, but Q320 guidance – or the lack thereof – will be the reveal much about Apple’s short-term outlook.
Apple is slated to release Q220 results after market close on Thursday, April 30, 2020. We’ll have them for you as always right around 1:30pm PDT / 4:30pm EDT. Apple’s conference call to discuss Q220 results is scheduled to start right after that at 2:00pm PDT / 5:00pm EDT. We’ll cover the conference call with live notes as usual, too. Just check our home page around 1:45pm PDT / 4:45pm EDT on Thursday, April 30, 2020 for that link.