apple (AAPL) Stocks rose on Monday after a report that the tech giant is able to reverse cooling demand for PCs with strong MacBook shipments in the third quarter.
The survey by the International Data Corporation showed that global PC shipments fell 15% from a year ago to about 74.3 million units, led by a 27.8% decline for HP Inc. (HPQ) . However, Apple posted a 40.2% gain for the three months ending in September, with shipments rising to just over 10,000 units of Mac PCs.
Apple said earlier this summer that Mac sales fell 11.35% during the three months to June, the third fiscal quarter, to just over $7.38 billion. iPad sales fell nearly 2% to $7.224 billion.
“Consumer demand has remained muted even though promotional activity from the likes of Apple and other players helped mitigate the fall and reduce the two-week channel inventory across the board,” said IDC’s Jitesh Ubrani. “Supply has also responded to the new declines by reducing orders with Apple being the only exception as supply increased in the third quarter to make up for lost orders caused by the shutdowns in China during the second quarter.”
Apple shares were up 0.14% in pre-market trading to indicate an opening bell price of $140.25 per share.
These numbers could allay at least some investor fears related to dwindling iPhone demand, following reports late last month that Apple had instructed suppliers and assemblers to scale back plans to boost production of the newly launched iPhone 14 by up to 6 million units, choosing instead to pursue a target of 90 million – roughly in line with last year’s tally and early summer forecast – for the second half of this year.
Analyst Wamsi Mohan at BofA Global Research cut Apple’s $25 target price, lowered it to $160 per share, while downgrading the stock to “neutral” on September 29, as it expected “material negative revisions to estimation” for its near-term earnings. .
Mohan pointed to what he called a “weaker iPhone 14 cycle,” set against rising risks to global consumer spending, slowing gains in services revenue, a return to pre-COVID demand levels for iPads and Macs, and headwinds from a stronger US dollar.
Foxconn, Apple’s largest aggregator and a key link in its global supply chain, reported record September quarter revenue last week and said it was “cautiously optimistic” about its sales outlook for the final three months of the year.
Apple declined to provide detailed revenue guidance for the September quarter after better-than-expected third-quarter earnings in late July, but said overall revenue growth was likely to outpace gains over the three months ending in June.
Apple said strong demand in China, as well as a weakening supply chain hit, helped iPhone revenue rise 2.8% from a year ago to $40.67 billion during the June quarter, just ahead of the street’s forecast of $40.5 billion.
Overall, Apple earned more than $19.44 billion in the fiscal third quarter, with revenue up 2% from a year ago to $82.96 billion, ahead of analysts’ estimates of $82.88 billion.