Soft iPhone sales will hit Apple’s Q1 2023 finances, weak dollar will help

iPhone 14 Professional

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For Apple’s Q1 2023 financial results, UBS forecasts Apple to have shipped 79 million iPhones, just a little beneath the 80 million consensus, however far larger than the “avenue low” of 74 million.

The issue stems from COVID lockdowns within the December quarter triggering “considerably lengthy wait instances” for the iPhone 14 Pro and Professional Max, the investor observe seen by AppleInsider reads. The height affect of disruptions occurred in November, with a wait time of 34 days within the U.S. and 36 days in China.

Referencing Apple’s personal disclosure over the Zhengzhou manufacturing facility scenario, UBS feels that wait instances have steadily improved for the Professional fashions.

The complete-year 2023 iPhone items ought to decline 3% year-on-year to 232 million, towards a consensus of 238 million, UBS reckons. Declines will likely be felt in developed markets, however progress in rising markets like India ought to partly mitigate the downturn.

Regardless of a scarcity of availability for Professional fashions, it is thought that the product combine hasn’t been skewed that a lot in direction of non-Professional fashions. Certainly, roughly 56% of iPhones within the December quarter bought within the U.S. have been apparently Professional fashions, which can present a “modest constructive” to ASPs for the interval.

Primarily based on an ASP of roughly $850 and a 40% contribution margin for the iPhone enterprise, UBS estimates a 5-million iPhone shortfall relative to the forecast would translate to a $1.7 billion hit to pre-tax earnings and a $0.10 drop in EPS.

For precise finance estimates, income and EPS are set at $120.3 billion and $1.93 respectively, versus a consensus of $122.9B and $1.96. Whereas UBS did decrease estimates by 3% to 4% in December because of the Zhengzhou disruptions, the energy of the Euro, Pound, Yen, and Yuan relative to the quarter helps even out any reductions based mostly on provide chain issues.

Transferring to March, estimates might be “a bit excessive” with modest draw back threat for the quarter. Whereas UBS would not count on detailed steerage from Apple just like pre-COVID outcomes, it does anticipate Apple will likely be extra cautious in discussing product demand throughout the complete catalog.

UBS lists Apple with a “Purchase” ranking and a $180 worth goal.