Apple set for a sales dip – but will that hurt its record-high share price?
Analysts predict that Apple will report a dip in sales on Thursday, but are unsure if this will stop its record-breaking share price surge.
It is anticipated the tech giant will report a two per cent year-on-year dip in sales down to $81.7bn (£63.5bn) this third quarter, as consumers cut back or hold of on high-value tech purchases.
“This is perhaps unsurprising given the substantial economic uncertainty swirling,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.
She pointed out that the outlook statement will be important to monitor demand, especially for Apple’s key iPhones, which have shown “resilience” lately.
Apple has experienced declines in sales, net income, and earnings per share year-on-year in three of the last four quarters, with operating free cash flow also declining year-on-year in all four.
Despite this, Apple shares have rocketed to an all time high, rising 57 per cent to $195.83 since the start of the year, and its market capitalisation of $3.1 trillion now exceeds that of the entire FTSE 100.
Laith Khalaf, head of investment analysis at AJ Bell, puts the share price swell down to factors such as hype around artificial intelligence and its new headset, as well as hopes for growth in the coming fiscal year.
Consensus estimates indicate a 10 per cent earnings growth for the year ending September 2024.
“At least expectations are low”, said Khalaf, adding that Apple is “particularly good at managing (and then exceeding) those”.