JPMorgan on Monday cut Apple’s (AAPL) iPhone shipment forecast amid uncertainty about when production at a major assembly plant in China will fully resume, projecting lower revenue and profit in the current quarter. But even with expected supply disruptions, the club remains optimistic about Apple’s ability to make up for production shortfalls in light of Beijing’s recent move to begin easing Covid-19 restrictions. iPhone volumes in Apple’s fiscal first quarter should come in at about 74 million, down from a previous estimate of about 82 million, according to analysts at JPMorgan. As a result, the bank now expects total revenue of $121 billion in the December quarter, compared to an initial forecast of $128 billion. JPMorgan said quarterly earnings per share should be $1.91 per share, down from a previous forecast of $2.14 per share. “Apple’s reliance on the Zhengzhou facility for iPhone production, particularly iPhone 14 Pro/Pro Max production, indicates that the headwinds for … revenue and earnings estimates in F1Q23 are likely to be significant,” the analysts wrote in a research note. Production at the world’s largest iPhone assembly facility, in Zhengzhou, China, was severely disrupted this month after the Chinese government imposed new lockdowns in the wake of the novel Covid outbreak. Apple said in a statement on November 6 that the plant is operating at “significantly reduced capacity.” However, analysts at JPMorgan expect the shipment shortfall to be partially offset in Apple’s fiscal second quarter, helped by a “limited, modest impact on consumer demand” despite delivery delays. The opportunity to address deficiencies [fiscal Q2] It may give long-term investors several attractive buying opportunities in the stock until the end of the year. Who – own it, don’t trade it – for its consistently strong cash returns, coveted ecosystem of products and services, and its overall leadership in hardware. Meanwhile, we are interested in getting a clearer picture of when iPhone production can be normalized in China. We see production hurdles as a temporary risk that could recede once China finally abandons its zero Covid policy. Destruction of supply-related demand at Apple tends to be minimal. Aside from production challenges in China, Apple’s stock has been held back this year by macroeconomic pressures and foreign exchange headwinds, with shares down nearly 16% year-to-date. Apple stock is up nearly 8% last week, as shares rallied Technology companies on weak stocks Inflation data for October is expected. Shares were trading down 0.29% Monday afternoon, at $149.27 per share. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of stocks.) As a subscriber of the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim places a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charity fund portfolio. If Jim talks about a stock on CNBC, he waits 72 hours after the trade alert is issued before executing the trade. The above investment club information is subject to our terms and conditions and privacy policy, along with our disclaimer. No fiduciary obligation or duty will be created, or created, by virtue of your receipt of any information provided in connection with Investment Club. There are no specific results or guaranteed profit.
Foxconn employees on the assembly line in Longhua, Shenzhen, China. The company has reportedly hired students to work overtime at its iPhone factory in Zhengzhou.
Kylie Shen | bloomberg | Getty Images
JPMorgan cut on Monday appleApple’s iPhone Shipment Forecast (AAPL) amid uncertainty about when production will resume at a major all-China assembly plant, with revenue and profits expected to decline in the current quarter. But even with expected supply disruptions, the club remains optimistic about Apple’s ability to make up for production shortfalls in light of Beijing’s recent move to start. Relaxation of Covid-19 restrictions.
