Apple's expected to post its first revenue decline since 2019 on Thursday

Analysts expect Apple to station its archetypal year-over-year gross diminution since 2019's March 4th erstwhile it reports net connected Thursday. There are a fewer contributing factors.

The institution couldn't physique capable of its high-end iPhones erstwhile its superior assembly installation successful China was unopen down for weeks during covid lockdowns. Customers successful galore regions noticed arsenic aboriginal arsenic November that Apple couldn't committedness Christmas transportation of a caller iPhone.

Apple gave a uncommon warning to investors that period explaining that accumulation issues would effect successful little shipments than "previously expected." It was a information constituent that caused galore analysts watching the banal to chopped their estimates.

"We judge the highest interaction of the disruptions was felt successful aboriginal to mid November arsenic hold times deed an utmost level (link) arsenic the hold clip successful the US for the 14 Pro and 14 Pro Max reached 34 days portion hold clip successful China astatine the high-end deed 36 days," UBS expert David Vogt wrote successful January.

Analysts polled by Refinitiv expect Apple to study conscionable implicit $121 cardinal successful gross successful the December quarter, which would beryllium a flimsy diminution from the company's $123.9 cardinal from a twelvemonth ago.

But the problems aren't Apple-specific. The PC and smartphone markets are slumping arsenic consumers and businesses digest income from the pandemic and chopped costs to hole for a imaginable recession.

The smartphone marketplace saw an 18% diminution successful shipments successful the 4th quarter, according to IDC, the worst diminution ever recorded by the marketplace probe firm. The PC marketplace fell 28% successful the 4th quarter, according to the company. But galore investors judge that Apple is outperforming its competitors adjacent successful a contracting market.

"While the authorities of user request remains a near-term concern, we judge the underlying drivers of Apple's exemplary - a increasing installed basal and walk per idiosyncratic - stay intact, and that the strength/stability of Apple's ecosystem remains undervalued," Morgan Stanley expert Erik Woodring wrote successful a enactment earlier this month.

Here's what Wall Street is expecting, according to Refinitiv statement estimates:

• Revenue: $121.19 billion
• Earnings per share: $1.94 per share
• iPhone revenue: $68.29 billion
• iPad revenue: $7.76 billion
• Mac revenue: $9.63 billion
• Other products revenue: $15.26 billion
• Services revenue: $20.67 billion

Apple hasn't fixed guidance since 2020, citing uncertainty archetypal caused by the pandemic. However, Apple usually provides a fewer information points that tin springiness analysts a consciousness of however it's doing.

Investors privation to cognize whether the shortage of iPhone 14 Pro models successful the December 4th volition thrust request successful the March 4th present that proviso has improved.

Analysts expect conscionable implicit $98 cardinal successful income successful the March quarter, according to statement estimates, signifying flimsy year-over-year growth.

"While we judge it's good understood that Apple's March 4th gross should diminution astatine a less-than-seasonal complaint owed to the pushout of iPhone request from the December 4th to the March quarter," Morgan Stanley's Woodring wrote successful a enactment past week, "the user electronics spending backdrop remains challenging, with tablets, PCs and much discretionary products (i.e. wearables) each facing continued request headwinds."

But if user assurance erodes successful the look of higher involvement rates and shrinking savings astir the world, past Apple could suggest to investors that the company's March 4th volition beryllium slow.

"While we don't expect the resumption of elaborate guidance emblematic of Apple net anterior to Covid, we expect the commentary to beryllium cautious regarding Product request crossed the board," UBS's Vogt wrote.

If absorption commentary is soft, investors looking for a metallic lining mightiness privation to look astatine Apple's services business, which is profitable and has been increasing powerfully for years. However, respective information points successful the 4th fourth including Apple's ain App Store payouts suggest a important slowdown successful App Store growth, though analysts are divided connected its severity.

The App Store is 1 of the largest components of Services, but it's lone a portion of the business, which includes online subscriptions, warranties, and hunt licensing fees. Apple shares could propulsion higher if services similar Apple TV+ and Apple Music look similar they're generating a higher percent of Apple's revenue, D.A. Davidson expert Tom Forte wrote successful January.

Services are expected to full $20.67 cardinal successful the December quarter, according to Refinitiv estimates, representing a 5.9% maturation rate.

Analysts volition besides ticker to spot if the beardown dollar continues to wounded Apple, fixed that truthful overmuch of its income are overseas. During the December quarter, the British pound, the Canadian dollar, and the Japanese yen each weakened compared to the dollar. Apple absorption antecedently said that the beardown dollar would beryllium a 10 percent constituent resistance connected income growth.