Apple (AAPL) is scheduled to report first-quarter results after the bell on Thursday, as investors look for more insight into the company’s iPhone sales performance, particularly in China. Barclays, Piper Sandler and Redburn Atlantic downgraded Apple stock in early January over concerns that the iPhone 15 was underperforming in China.
This, combined with TF International Securities analyst Ming-Chi Kuo predicting a 15% drop in iPhone shipments, has hurt Apple’s stock price, which has fallen 3.5% in the past month.
However, the company’s stock could start to turn around due to strong results in the quarter and a positive outlook for iPhone sales.
Wall Street expects Apple to report earnings of $2.11 per share and revenue of $117.9 billion this quarter, according to estimates compiled by Bloomberg. This would be an increase from last year, when Apple reported his EPS of $1.88 on revenue of $117.2 billion.
But overall sales in Greater China, Apple’s third-largest sales region after North America and Europe, are expected to decline from $23.9 billion to $23.5 billion. Analysts say the resurgence of Huawei, which rivals Apple in high-end smartphones, and China’s sluggish economic recovery are weighing on Apple’s sales in the region.
The company’s mobile phone sales are expected to be $68.6 billion, which would be an increase from the same period last year, when Apple reported $65.78 billion in iPhone sales. Apple’s Mac revenue is also expected to recover slightly, with analysts expecting him to report $7.9 billion in revenue for the quarter, compared to $7.7 billion a year earlier.
But iPad sales are expected to fall by more than $2 billion to $7.06 billion from last year’s $9.4 billion. Apple plans to launch refreshed iPads and Macs in March, which could help boost sales in both business segments over the next year, according to Bloomberg’s Mark Garman.
Wearables, home and accessories sales are expected to be $12 billion in the quarter, down from $13.5 billion in the first quarter of last year. Apple is in an ongoing patent battle with medical device maker Masimo, which has forced the company to temporarily remove devices from stores.
The company has since removed the controversial blood oxygen sensor component from its Series 9 and Ultra 2 watches, but it’s unclear how much that affected sales.
Meanwhile, Apple’s services division’s revenue is expected to be between $20.8 billion and $23.4 billion.
Apple’s gains come as the company prepares to launch its Vision Pro AR/VR headset. The device, which Apple calls the Spatial Computer, will be available on February 2nd for $3,499. And while it’s certainly an impressive product, its price will likely limit sales for most consumers.
Apple hasn’t announced exact device sales numbers, but we’ll be waiting to see what CEO Tim Cook will say about the early uptake of Vision Pro pre-orders and how the developer community will react. It will be interesting to see. At the end of the day, for Vision Pro to be successful, developers need to build apps for it.
daniel howley I’m the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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