Apple, Inc. (NASDAQ: AAPL) is scheduled to report its fiscal-year third quarter on Thursday after the market closes.
Analysts, on average, expect the company to report earnings per share of $1.08 on revenue of $74 billion. This will mark a decline from the year-ago EPS of $1.20 and revenue of $82.96 billion.
An Apple bull is confident that the company will at least hit Street expectations.
In-Line Q3 Guaranteed: iPhone units will likely show an upside relative to expectations in the June quarter, going by a clear uptick in demand around the key China region, said Wedbush analyst Daniel Ives.
Higher average selling price and overall upgrade activity on the iPhone 14 Pro may have helped the company override the choppy macro environment, he said.
The analyst noted that ASPs were trending toward $900/$925 for the iPhones.
"It's unique that this late the iPhone cycle, with iPhone 15 around the corner this fall, Apple is seeing such strong iPhone 14 demand," he said.
Ives also said that the App Store uptick will likely keep Services revenue on the upswing into the fiscal year 2024. These two combined should translate into headline numbers that will likely help Apple to at least meet Street expectations, he added.
Focus Items: Ives said the Street will remain laser-focused on CEO Tim Cook's comments on consumer demand globally and what they mean for the path forward.
"We would expect relatively conservative September guidance as this is all about the drumroll to the main event with the anniversary iPhone 15 launch slated for the mid-September timeframe," he said.
Services Acceleration: Ives sees Apple's acceleration in Services business growth over the coming quarters to a double trajectory. The expectation is premised on another 100 million+ new iPhone users added to the Apple ecosystem over the past 18 months, improving attach rates and price increases.
Increasing overall cloud storage plans, according to the analyst, also remains an upward trend for Apple's Services business. Additionally, the overall FX headwinds have abated a bit, creating easier year-over-year comparisons into fiscal year 2024, he said.
"We believe overall the Services business is worth $1.3 trillion to $1.4 trillion for Apple's sum-of-the-parts valuation and remains an underappreciated asset by the Street with many naysayers still not believers in the "new Apple valuation" reset in motion," Ives said.
Ives has an Outperform rating and a $220 price target for Apple shares.
Apple shares rose 1.35% to $195.83 on Friday, according to Benzinga Pro data.