Apple's Q1 revenue is expected to be $124.318 billion, adjusted net income is $35.527 billion, and adjusted EPS is $2.352, according to Bloomberg's consistent expectations.
Apple is set to report FY25 first-quarter earnings results after market close on Thursday, January 30, 2025.
Apple's Q1 revenue is expected to be $124.318 billion, adjusted net income is $35.527 billion, and adjusted EPS is $2.352, according to Bloomberg's consistent expectations.
Previous Quarter Review
Apple's fiscal fourth-quarter results beat Wall Street expectations for revenue and earnings per share, but net income slumped after the company paid a one-time charge as part of a tax decision in Europe.
Here's how the iPhone maker did versus LSEG consensus estimates for the quarter ending Sept. 28:
Earnings per share: $1.64, adjusted, versus $1.60 estimated
Revenue: $94.93 billion vs. $94.58 billion estimated
iPhone revenue: $46.22 billion vs. $45.47 billion estimated
Mac revenue: $7.74 billion vs. $7.82 billion estimated
iPad revenue: $6.95 billion vs. $7.09 billion estimated
Other Products revenue: $9.04 billion vs. $9.21 billion estimated
Services revenue: $24.97 billion vs. $25.28 billion estimated
Gross margin: 46.2% vs. 46.0% estimated
Apple said on a call with analysts that it expects “low to mid-single digit” sales growth during the December quarter. It also signaled that it expects services growth to be about the same as its growth rate for the past year, which was 12.87%.
Q4 Results Outlook
Apple’s iPhone Sales in China Plunged 18% in Holiday Quarter
Sales of Apple Inc. iPhones dived 18.2% in China during the December quarter, according to independent research, a major setback for the company in its biggest market after the US.
The company’s flagship handsets, China’s top sellers a year earlier, relinquished the top spot to Huawei Technologies Co., Counterpoint Research found. Apple slipped to third in the world’s largest smartphone arena over the three months, commanding about a sixth of the market. The drop in China drove a global slump of 5% in iPhone sales during the key shopping period.
The decline underscores an uneven debut for the latest generation of iPhones, which started off strong in China before losing momentum. The new devices distinguish themselves with the addition of artificial intelligence upgrades — but in China, most of those new features are still not accessible as Apple seeks out a local partner to provide on-device and cloud AI infrastructure. The company’s in talks with everyone from Baidu Inc. and Tencent Holdings Ltd. to startups like Zhipu AI, but no deal has yet been concluded.
Whether you are an Apple shareholder or not, one critical element has to be recognized about the company and its stock at the beginning of Fiscal 2025. Apple is no longer growth-dominant in the highest-growth fields in the world. It has largely entered a period of equilibrated growth, and is very much dependent on legacy inventions, repurposed for a modern audience, to sustain its moderate expansion.
Focus on Q2 Guidance
While Apple may hit its guidelines come January 30th when it reveals its results, it still doesn't necessarily mean that they'll be immune to a sell-off, as seasoned investors will know by now, guidance for Q2 will arguably be more important than the results themselves, absent a huge miss on earnings.
Nonetheless, the Q2 outlook looks mixed. Consensus has iPhone sales at $48.11 billion, which is c.5% better off Y/Y. It is attributed this to iPhone 16 upgrade cycle and Apple Intelligence, but this doesn't come without caveats given the weaker global macroeconomic environment in the final quarter of last year.
Looking forward, the management will be conservative in their guidance as usual.
Analyst's opinions
Jefferies told investors to dump Apple stock, warning of a potentially weak revenue number from the technology giant.
Analyst Edison Lee downgraded shares to underperform from hold. Lee also cut his price target to $200.75 from $211.84, now reflecting the potential for shares to drop 12.7%.
Lee said Apple should miss the revenue growth forecast of 5% for the first quarter of the 2025 fiscal year when it reports later this month. He said the company will likely guide second-quarter revenue to a percentage in the low single digits, which would also come in lower than consensus forecasts.
The overall cost of manufacturing the iPhone 16 Pro Max is 5% less than the iPhone 15 Pro Max, the BofA analysts estimated. All else being equal, this would add 320 basis points to gross margins of the iPhone 16 Pro Max, the analysts said.
Although the analysts noted that there is less of a year-on-year improvement in costs for non-Pro models, they maintained their "buy" rating of Apple, citing "margin resiliency" and the adoption of the company's artificial intelligence offering over time.
