Reading Between the Lines of Apple’s 2Q23 Earnings Q&A With Analysts (Daily Update)

Hello everyone. Welcome to a new week.

Last Friday, we went over the numbers from Apple’s 2Q23 earnings release. We also looked at two of the major themes from earnings: the impact from less device upgrading and Apple’s emerging markets strength.

In today’s update, we will focus on Apple’s earnings Q&A session with analysts. After recapping each question-and-answer exchange that occurred on the call between Apple and sell-side analysts, we will go over my thoughts / response to the exchange. Let’s go beyond what was talked about on the call.

NOTE: The following earnings call questions (“Q (Sell-Side Firm)”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, MarkerBeat offers a written transcript here.

iPhone

Q (Morgan Stanley): Did Apple experience iPhone demand deferral or destruction arising from the COVID shutdowns in late 2022?

Cook: Our 2Q23 results reflected some iPhone demand carryover from 1Q23. iPhone production is back where we want it to be.

My response: Recall our discussion heading into earnings about two variables driving iPhone sales in 2Q23: Underlying customer demand and a sales carryover from 1Q23 related to COVID shutdowns. Cook’s answer implies that

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Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts (Daily Update)

Hello everyone. Welcome to a new week.

Last Friday, we went over the numbers from Apple’s 1Q23 earnings release. We also looked at two of the major themes from earnings: the significant FX impact on Apple’s results and changing device upgrading trends.

In today’s update, we will focus on Apple’s 1Q23 earnings Q&A session with analysts. Instead of just recapping the question and answer exchanges that occurred on Apple’s call, we will go over Neil’s thoughts / response to each exchange. This will allow Neil to go beyond what was talked about on the call. Let’s jump right in.

Reading Between the Lines of Apple’s 1Q23 Earnings Q&A With Analysts

NOTE: The following earnings call questions (“Q”) and answers (“Cook” or “Luca”) have been cut, summarized, paraphrased, and rearranged for clarity. To read the full question and answer exchanges, The Motley Fool offers a written transcript here.

Supply Chain

Q: What is the state of Apple’s supply chain? Do you expect to increase inventory levels to insulate from supply disruptions?

Cook: Production is now back to “what we need it to be.” We continue to optimize our supply chain. We now have final assembly for iPhone in three countries. Given all that has happened over the past three years, our supply chain has proven to be resilient.

My response: Apple received a variation

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.