Apple Inc (NASDAQ:AAPL, ETR:APC) will hand down its latest earnings report after Thursday’s closing bell with Bank of America analysts expecting a strong quarterly performance driven by initial demand for the iPhone 16, which launched back in mid-September.
Wall Street analysts, on average, expect Apple to report earnings per share of $2.36 on revenue of $124 billion, while BofA expects revenue to come in higher at $126 billion.
The bank’s analysts expect iPhone units of 79 million, above the Street consensus of 77 million.
However, they lowered their March quarter iPhone units estimate to 49 million from 56 million, compared to the consensus of 52 million, citing the weak macro and staggered launch of Apple Intelligence features, which they see as yet to gain widespread adoption.
Apple’s iPhone sales have been weaker in China where it is yet to launch Apple Intelligence but worries are “overdone,” analysts believe.
“Recent iPhone price cuts in China put some of the iPhone models below the 6000RMB threshold to qualify for a 15% government subsidy. While some uncertainty remains regarding tariffs, the company has historically managed to work through such issues, and our base case remains the same,” they wrote.
“We expect the new Trump administration to also alleviate some of the regulatory issues being imposed from the EU (DMA) and domestic DOJ issues as well.”
For the December quarter, Services is expected to be a growth driver with BofA expecting revenue growth of 13% year-over-year.
Recent data on developer revenues indicates App Store revenue grew by 15% from the year-ago quarter, they added.
BofA awarded Apple a ‘Buy’ rating and $253 price target. Shares traded at $238 late morning on Thursday.
“In our opinion, weaker iPhone sales are well understood by investors, and we reiterate our ‘Buy’ rating on margin resiliency, tailwinds to gross margin, and strong cash flow,” they wrote. “Investors will likely soon shift focus to Worldwide Developers Conference (WWDC), increased AI partnerships, launch of iPhone 17.”