Apple’s AAPL third-quarter fiscal 2024 results, to be reported on Aug 1, are expected to reflect the benefits of an improving PC market, as well as steady growth in the Services business.
The PC segment witnessed growth in the second quarter of calendar 2024. Per IDC’s latest report, 64.9 million PCs were shipped, up 3% from the year-ago period. In contrast, Gartner estimates shipment of 60.6 million units, up 1.9% year over year.
However, in both lists, Apple gains the most in terms of shipment. Per IDC, the iPhone maker is estimated to have shipped 5.7 million Macs, thereby grabbing a market share of 8.8% compared with 7.5% in the year-ago quarter. Gartner estimates that Apple’s shipments increased 13.1% with a market share of 9% against 8.1% in the year-ago quarter.
Apple’s estimated shipment growth rate is the largest in IDC’s vendor list. While shipments of Acer Group, Lenovo LNVGY and HP HPQ are expected to have grown 13.7%, 3.7% and 1.8%, respectively, Dell Technologies DELL is likely to have declined 2.4%.
The Zacks Consensus Estimate for fiscal third-quarter Mac net sales is pegged at $6.92 billion, suggesting 1.2% year-over-year growth.
Apple Inc. Revenue (TTM)
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Steady Services Growth to Aid Top Line
Apple’s Services business is expected to benefit from increasing users of the App Store and growing viewership of Apple TV+. Moreover, the growing adoption of Apple Music, Apple Arcade, Apple News+ and Apple Card has been noteworthy.
Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. It accounted for 26.3% of sales in second-quarter fiscal 2024.
Apple had more than 1 billion paid subscribers across its Services portfolio at the end of the fiscal second quarter. This is expected to have increased in the to-be-reported quarter, thanks to the growing installed base of Apple’s devices, as well as the popularity of apps like Apple TV+.
The Zacks Consensus Estimate for fiscal third-quarter Services net sales is pegged at $24 billion, suggesting a 13.1% year-over-year growth.
iPad Sales to Increase Y/Y
This Zacks Rank #3 (Hold) company expects iPad revenues to grow double-digit in the fiscal third quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for fiscal third-quarter iPad net sales is pegged at $6.88 billion, suggesting 19% year-over-year growth.
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