Apple Inc., a multinational technology company, is scheduled to report its earnings for the second fiscal quarter on Thursday after the markets close. Despite setting low investor expectations, Apple may surpass them, even if sales growth remains sluggish. The company had previously indicated sales levels similar to the previous year at $94.84 billion during the same period, with flat iPhone sales.
Analysts have provided consensus estimates for Apple’s performance in this quarter. They anticipate earnings per share to be $1.50 and revenue to reach $90.04 billion. Additionally, expectations for Apple’s business units in the March quarter include revenue projections for the iPhone, Mac, iPad, Wearables, Home and Accessories, and Services segments, as compiled by StreetAccount estimates.
The potential forecast for the current quarter is around $83.23 billion in sales, reflecting a modest 1.8% annual growth rate. Despite a 10% decrease in Apple’s shares this year, concerns loom regarding weak demand for the 2023 iPhone 15 model.
One primary focus for investors will be Apple’s performance in its third-largest market, China. Recent reports of a 13% sales decline in Greater China have raised concerns about deteriorating market conditions. The impact of reduced sales in China, possibly influenced by political sentiments and increased competition from local firms like Huawei, is a cause for uncertainty.
Analysts like Bernstein’s Toni Sacconaghi acknowledge the challenges Apple faces in China but remain optimistic about the company’s long-term potential. Sacconaghi believes that Apple’s current struggles in China are more cyclical than structural and points to historical fluctuations in the region.
There are contrasting data points on Apple’s performance in China, with reports of Huawei’s significant surge compared to Apple’s decline. Despite challenges, some analysts suggest a potential improvement in iPhone demand that may exceed previous expectations.
As Apple enters the next quarter, analysts are cautious about the company’s guidance and potential market responses. The company’s capital return plans, including share buybacks, are closely watched by investors. Updates on revenue, gross margin forecasts, and capital allocation strategies are key factors to monitor in the upcoming earnings report.
Amid uncertainties about iPhone sales, market conditions in China, and overall macroeconomic factors, Apple’s performance in the second quarter of 2024 will be closely examined by investors and analysts. The company’s ability to navigate challenges, sustain growth, and adapt to changing market dynamics will be pivotal in shaping its future trajectory and investor sentiment.
