Apple is gearing up to announce its Q1 earnings 2024 after the close of U.S. markets on January 31, and all eyes will be on the tech giant. Apple (AAPL) will report its Q1 earnings after the bell on Thursday. This is as investors seek more insight into the company’s sales, especial China iPhone sales performance.
Barclays, Piper Sandler, and Redburn Atlantic downgraded Apple’s stock in early January on fears that the iPhone 15 is underperforming in China. The decline in China iPhone sales coupled with TF International Securities analyst Ming-Chi Kuo predicting a 15% decline in iPhone shipments, has inflicted pain on Apple’s stock price, with shares falling 3.5% over the last month.
Apple facing challenges
Despite an impressive 49% surge in Apple stock during 2023, outpacing the Nasdaq Composite’s 44% returns, the company struggled to keep pace with other FAANG (Meta , Apple, Amazon, Netflix, and Alphabet) constituents, making it the weakest performer among the group. Furthermore, in 2024, Apple also faced challenges by relinquishing its $3-trillion market cap to Microsoft.
Apple Q1 earnings
A strong Q1 earnings for Apple a positive outlook with boost in iPhone sales, however, could begin to turn around the company’s stock performance.
For the quarter, Wall Street is expecting Apple to report earnings per share of $2.11 on revenue of $117.9 billion, according to estimates compiled by Bloomberg. That would mark an increase from last year when Apple reported EPS of $1.88 on revenue of $117.2 billion.
Competing with Huawei in China
But China iPhone sales, Apple’s third-largest sales region behind North America and Europe, is expected to fall from $23.9 billion to $23.5 billion. Analysts say a resurgent Huawei, which is selling high-end smartphones that rival Apple’s, and China’s faltering economic recovery are cutting into Apple’s sales in the region.
iPhone revenue
The company’s iPhone revenue is expected to come in at $68.6 billion, which would be a step up from the same period last year when Apple reported iPhone revenue of $65.78 billion. Apple’s Mac revenue also appears set for a slight recovery, with analysts anticipating sales of $7.9 billion in the quarter versus $7.7 billion in the same quarter last year.
Apple revenue forecast
But iPad revenue is expected to drop more than $2 billion to $7.06 billion compared to $9.4 billion last year. According to Bloomberg’s Mark Gurman, Apple will introduce refreshed iPads and Macs in March, which could help goose sales numbers and could increase Macs and iPad revenue in the year ahead.
Wearables, home, and accessories should generate revenue of $12 billion in the quarter, down from $13.5 billion in Q1 last year.
Apple’s Services segment, meanwhile, is expected to see sales of $23.4 billion, up from $20.8 billion.
Launching Vision Pro AR VR headset
Apple’s Q1 earnings come as the company prepares to launch its Vision Pro AR VR headset. The device, which Apple calls a spatial computer, goes on sale Feb. 2 for $3,499. And while it’s certainly an impressive product, its price tag will likely limit sales among most consumers.
Apple stock update
At closing the Apple stock was at $184.40 and after hours was at 185.68
