Apple’s Quarterly Earnings: What to Expect
As Apple prepares to release its December-quarter earnings, investors and analysts are bracing themselves for a mixed bag of results. While the holiday shopping season typically boosts sales, concerns about weakening demand in China and the impact of proposed tariffs loom large.
iPhone Sales: A Cause for Concern
Supply chain data suggests that Apple’s sales in China are slowing, and the lack of availability of Apple Intelligence, the company’s AI features, in Chinese markets may be contributing to this trend. Loop Capital analyst Ananda Baruah has downgraded Apple to hold, citing softer demand for the iPhone 16, despite the introduction of iOS 18 and its Gen AI features.
Guidance for the March Quarter
New Chief Financial Officer Kevan Parekh is expected to provide investors with key data points to estimate earnings per share and revenue for the March quarter. LSEG estimates Apple’s revenue will grow by approximately 3.8% to $124.13 billion, while Apple has projected “low- to mid-single digit” sales growth.
Services Business: A Bright Spot
One area of potential growth for Apple is its services business, which includes device warranties, Apple TV+, and more. Barclays analysts predict that services could grow by as much as 14% on an annual basis, offsetting lower iPhone sales.
Tariffs and AI Strategy
Investors will be watching closely for Apple’s response to proposed tariffs and its overall AI strategy. With growing competition from domestic brands in China, Apple’s ability to adapt and innovate will be crucial to its success.
Consensus Estimates
According to LSEG consensus estimates, analysts are expecting guidance for the March quarter of $1.66 in earnings per share on $95.46 billion in revenue. As Apple navigates a complex landscape of global demand, tariffs, and technological innovation, its quarterly earnings will be closely scrutinized by investors and analysts alike.
Leave a Reply