AppleInsider may earn affiliate commissions on purchases made through links on our site.
UBS analysts say Soft Holiday’s iPhone sales impacted Apple’s first fiscal quarter, while a stronger currency against a weaker dollar may have helped Apple’s finances.
As for Apple’s financial results for the first quarter of 2023, UBS estimates that Apple shipped 79 million iPhones. This is slightly below the consensus of 80 million units, but well above the “market low” of 74 million units.
The problem stems from the December quarter’s COVID lockdown, which caused “pretty long wait times” for the iPhone 14 Pro and Pro Max, according to the investor. Apple Insider read. The impact of the disruption peaked in November, when he had a 34-day wait in the US and 36 days in China.
UBS feels that wait times for Pro models are steadily improving, citing Apple’s own disclosures about the Zhengzhou factory situation.
UBS calculates that iPhone sales for the full year 2023 will fall 3% year-on-year to 232 million units, against consensus of 238 million units. Developed markets are seeing declines, but growth in emerging markets such as India should partially cushion the recession.
Despite the lack of availability of Pro models, the product mix is believed to be less skewed towards non-Pro models. In fact, about 56% of his December quarter iPhones sold in the US were clearly Pro models, which would be a “moderate plus” for ASP during this period.
Based on an ASP of about $850 and a 40% contribution margin for the iPhone business, UBS said a shortfall of 5 million iPhones compared to forecast would hit pre-tax profit by $1.7 billion and EPS by 0.10. We estimate that it will bring the dollar down.
Actual financial projections set revenue and EPS at $120.3 billion and $1.93, respectively, while consensus is $122.9 billion and $1.96. Zhengzhou turmoil prompted UBS to cut its estimates by 3% to 4% in December, but the strength of the euro, sterling, yen and yuan to the quarter has not evened out cuts based on supply chain problems. help.
Moving into March, estimates could be “a bit higher” and downside risks to the quarter are modest. expects to be more cautious about product demand across catalogs.
UBS lists Apple with a “Buy” rating and a target price of $180.