All eyes on Apple's Q3 amid looming macro challenges
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Apple (NASDAQ:AAPL) is scheduled to announce Q3 earnings results on Thursday, July 28th, after market close.
The tech giant has seen a series of price target cuts in recent days - including from BofA, Morgan Stanley and Well Fargo - over macro economic challenges including rising inflation, a surging dollar, supply chain constraints and COVID restrictions in China.
SA contributor Bohdan Kucheriavyi recently called out Appleâs "over-reliance on China", suggesting that this puts its production at constant risk of disruption and will undermine its Q3 performance.
The firm posted Q2 results that beat expectations, led by strength in the iPhone, but CFO Luca Maestri said June revenue is likely to be impacted by supply constraints caused by COVID, silicon shortages, with the value of the constraints between $4 billion and $8 billion, "substantially larger" than Apple saw in the March quarter.
For Q3, the consensus EPS Estimate is $1.15 and the consensus Revenue Estimate is $82.97B (+1.9% Y/Y).
Apple's Mac and services businesses are likely to see some weakness, but iPhone sales are set to remain solid. According to Canalys, the company gained market share in smartphones during Q2, even as overall smartphone sales slipped 9% year-over-year. The research firm listed strong iPhone 13 demand as a driver of this market share gain.
Investors can expect cautious commentary from management amid the multiple headwinds, including signs of a slowdown in smartphone demand ahead of the launch of the iPhone 14 in the fall.
Concerns over its performance amid the global inflation crisis has already hurt its share price, which has dropped just over -15% in the year to date. Still, shares have fared relatively better than peers:

A recent SA contributor analysis has warned that amid these multiple macro headwinds, Apple's shares may plunge following the Q3 results.
Apple's Q3 performance will also be a bellwether for how the broader tech sector will fare at the end of this earnings season and how the remainder of the year will look for the tech company and the sector at large.
The firm has reportedly slowed down hiring plans due to concerns about a possible slowdown in the U.S. economy, joining other big-name tech companies that have recently altered some of the hiring plans.
Over the last 1 year, AAPL has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time.
Over the last 3 months, EPS estimates have seen 4 upward revisions and 24 downward. Revenue estimates have seen 5 upward revisions and 20 downward.