apple (AAPL) plans to release first-quarter earnings after its closing bell on February 2, with investors and analysts wondering how much the COVID lockdowns in China will affect iPhone sales during the holiday season. I’m trying to see if I gave the
What analysts expect from the company is how it compares to Apple’s performance in the same quarter last year, as compiled by Bloomberg.
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Earnings: Expected $121.1 billion vs. $123.9 billion in Q1 2022
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Adjusted earnings per share: $1.94 forecast vs $2.10 in Q1 2022
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iPhone Earnings: Expected $68.3 billion vs. $71.6 billion in Q1 2022
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Mac Earnings: Expected $9.72 billion vs. $10.8 billion in Q1 2022
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Earnings on iPad: Expected $7.7 billion vs. $7.2 billion in Q1 2022
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Wearable: Expected $15.3 billion vs. $14.7 billion in Q1 2022
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service: Expected $20.4 billion vs. $19.5 billion in Q1 2022
Apple has outperformed many of the big tech companies over the past 12 months, with its stock down just 16% relative to Microsoft as of Wednesday afternoon (MSFTMore), which is 18% off and is owned by Google’s parent company, Alphabet (goog, Google), which is 25% off. However, it is not without its own problems.
In November and December, Apple faced significant headwinds from COVID lockdowns and worker protests at manufacturer Foxconn’s facility in Zhengzhou, China. Employing 200,000 people, the factory produces the majority of Apple’s iPhone 14 Pro and iPhone 14 Pro Max handsets.
Starting at $999 and $1,099 respectively, the iPhone 14 Pro and iPhone 14 Pro Max are two of Apple’s most important devices. Soaring prices will raise the average selling price of iPhones and increase revenues for tech giants.
according to IDC Worldwide Quarterly Cell Phone TrackerApple’s iPhone shipments fell 14.9% year-on-year, from 85 million units in the fourth quarter of 2021 to 72.3 million units in the fourth quarter of 2022, according to the company.
But it’s not just iPhones that have run into problems. On Apple’s fourth-quarter earnings call, Luca Maestri, Apple’s CFO, said he expected a nearly 10% negative year-over-year impact from foreign exchange headwinds.
Additionally, Mac revenue is expected to “decline significantly year-over-year. Services revenue, meanwhile, is expected to increase, but also faces foreign exchange headwinds.
According to UBS analyst David Vogt, Apple’s second quarter could also face challenges.
“While we believe the market is cautious enough on the December quarter results, we believe there is slight downside risk to our March outlook,” he wrote in a recent investor note. “While we do not expect detailed guidance typical of Apple’s earnings pre-Covid to resume, we do expect comments to be cautious regarding overall product demand.”
Despite the potential slowdown in sales, Apple has managed to avoid major layoffs, unlike peers such as Microsoft, Google and Amazon (AMZN).
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