In an upcoming financial report, Apple is expected to announce its fifth straight quarter without any revenue growth. Investors are eagerly awaiting the company's outlook for the March quarter, particularly concerning iPhone sales. The report for Apple's first fiscal quarter will be disclosed on Thursday after the market closes.

For the quarter ended in December, Apple had already informed investors to expect revenue to remain steady compared to the previous year. According to Wall Street consensus as tracked by FactSet, analysts predict revenue of $118.7 billion, a slight increase from the $117.2 billion reported a year ago. Earnings for the first fiscal quarter are expected to reach $2.11 per share, up from $1.88.

As always, the spotlight will be on the performance of different product lines. Analyst estimates indicate that iPhone sales for the quarter will amount to $67.6 billion, a 2.8% increase from the previous year. Mac sales are expected to reach $7.9 billion, showing a 2.5% growth. Services, a key revenue driver for Apple, are projected to grow by 12.3% to $23.3 billion, approaching an annualized run-rate of nearly $100 billion.

However, concerns have been raised about a potential decline in iPad sales, which are estimated to drop by 21.4% to $7.4 billion. The Wearables, Home, and Accessories category is also expected to experience a decline of 15.8% to $11.3 billion. Although investors hope for insights into Apple's artificial intelligence strategy, history suggests that the company rarely provides significant product updates during earnings calls, so expectations should be tempered.

One of the concerns on Wall Street is the impact of a highly competitive smartphone market in China, where Apple seems to be losing ground to Huawei. Analysts anticipate that Apple's outlook for the March quarter will shed light on this issue. Currently, consensus estimates suggest total revenue of $95.9 billion for the March quarter, a slight increase from the previous year, with earnings expected to reach $1.58 per share, up by six cents from the year prior.

Analyst Erik Woodring from Morgan Stanley believes that Apple's December quarter results will surpass Street revenue and earnings estimates by 1% to 2%. However, he predicts that March quarter guidance will align more closely with his own forecast, projecting revenue of $93.4 billion – implying a year-over-year decline of approximately 2%. Woodring also suggests that consensus estimates for Apple's fiscal year ending in September 2024 are still too optimistic for both revenue and profits.

Woodring emphasizes that these results will be a "clearing event," shifting investor focus to the growth potential in services, as well as the opportunities presented by "edge" AI devices such as iPhones, iPads, and Macs, along with the improvement of gross margins. Despite expressing his concerns, Woodring maintains an Overweight rating and a $220 target price for Apple's stock.

Apple's earnings announcement will undoubtedly provide valuable insights into the company's performance and expectations for the future. Investors and industry analysts are eager to see how the tech giant navigates through a challenging market landscape while capitalizing on its strengths and innovation.