Apple’s China sales in focus ahead of earnings

Published

1 year ago

May 2, 2024

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Apple reports earnings for its second fiscal quarter on Thursday after the markets close.

Investor expectations are low and Apple could surpass them even if sales growth is weak. In February, Apple said it expected sales similar to last year’s $94.84 billion during the same period and flat iPhone sales.

Here’s what analysts expect from Apple, according to LSEG consensus estimates:

Earnings per share: $1.50
Revenue: $90.01 billion

Here’s how Apple’s business units are expected to fare in the March quarter, per LSEG estimates:

iPhone revenue: $46.00billion
Mac revenue: $6.86 billion
iPad revenue: $5.91 billion
Wearables, home and accessories revenue: $8.08 billion
Services revenue: $23.27 billion

Analysts expect Apple to give a forecast for the current quarter of about $83.23 billion in sales, which would be 1.8% annual growth. Apple shares are down about 10% this year, underperforming its peers and the broader market. Some worry that the 2023 iPhone 15 may be seeing weak demand.

But the biggest theme that investors will be watching for is the overall trend in Apple’s third-largest market: China. In the December quarter, sales dropped 13% in Greater China, which includes Hong Kong and Taiwan. Analysts polled by FactSet expect $15.25 billion in China regional sales, which would be a 14% year-over-year decline.

Even worse is what the slump could indicate: Deteriorating conditions in a key market for Apple where it also manufactures the vast majority of its products. Chinese government agencies over the past year have reportedly asked staff to curtail use of “foreign” devices — iPhones — suggesting that Apple may not have the support of Chinese national leadership.

Apple also faces increased competition from local companies, including Huawei, which recently introduced a 5G smartphone despite U.S. export controls on advanced chips.

“AAPL has de-rated significantly amid a weak iPhone 15 cycle and fears that Apple’s China business is structurally impaired,” Bernstein analyst Toni Sacconaghi wrote in a note last week. He has an outperform rating on the stock.

But Sacconaghi doesn’t see Apple being permanently hampered by Chinese Communist Party sentiment, calling the current weak cycle “more cyclical than structural” and pointing out Apple’s historical volatility in the region.

“In strong iPhone cycles, Apple’s China revenues typically grow much faster than Apple overall, as Chinese consumers embrace the new phone,” Sacconaghi wrote. “The strong embrace is typically followed by several quarters of weaker (and often negative YoY growth), as we are seeing now.”

Third-party data points on China aren’t strong, either.

Data from Counterpoint Research shows Huawei surged 70% on an annual basis in March, while Apple declined 19%, falling into third place. However, analysis of the data suggests that the “preliminary signs of iPhone demand improvement … is broader than previously expected,” UBS’ David Vogt wrote this week.

Meanwhile, state statistics show iPhone sales falling 33% in February, the second consecutive month of declining shipments.

Wells Fargo analyst Aaron Rakers said in a March note that iPhone sales could be down 20% on an annual basis during the quarter.

Expectations for the quarter are muted, and how Apple says it sees the current quarter shaping up may be more important than the results for the March quarter.

“There’s a chance Apple could see a relief rally/squeeze higher on a ‘better than feared’ earnings report/guide,” Morgan Stanley analyst Erik Woodring, who has an overweight rating on the stock, wrote in an April note. “This creates a tricky setup, and one we don’t believe investors necessarily need to step in front of.”

Apple hasn’t provided guidance since 2020, but company executives give data points that analysts can use to project sales. “June quarter revenue and gross margin guidance will be critical this quarter,” Woodring wrote.

Apple also typically updates investors during second-quarter earnings about how much it plans to spend on share buybacks for the rest of the year.

“We expect Apple to update its capital return plans at March quarter earnings, and don’t expect any meaningful deviation from recent plans,” Woodring wrote. In May 2023, Apple said it had authorized an additional $90 billion in repurchases.

Technology

Tesla stock slips after report EV maker is halting Cybertruck and Model Y production

Published

4 hours ago

June 17, 2025

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Tesla stock slips after report EV maker is halting Cybertruck and Model Y production

A Tesla Cybertruck sits on a lot at a Tesla dealership on April 15, 2024 in Austin, Texas.

Brandon Bell | Getty Images

Tesla shares slid more than 2% Tuesday after a report that the electric vehicle maker was halting production of Cybertruck and Model Y models for a week in Austin, Texas.

The production stoppage begins June 30, Business Insider reported, citing a staff meeting where the announcement was made. The pause, which is for maintenance on production lines, would be the third such shutdown at the Austin facility in the past year, according to BI.

Tesla is tentatively launching the robotaxi in Austin on June 22, using Model Y vehicles equipped with a new version of the company’s “Full Self-Driving” technology.

CEO Elon Musk shared a video clip on X last week of a Model Y robotaxi on a road in Austin, adding to the buzz for the promised launch.

Reddit stock jumps after company rolls out new AI advertising tools

Published

6 hours ago

June 17, 2025

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Reddit stock jumps after company rolls out new AI advertising tools

Thomas Fuller | Lightrocket | Getty Images

Reddit shares popped about 5% after the social media company debuted new artificial intelligence-powered advertising tools.

The two new features, announced Monday in a post during the Cannes Lions festival, will help brands better leverage discussions on the platform. The company said the tools are powered by an engine called Reddit Community Intelligence that turns “posts and comments into structured intelligence.”

Reddit announced a “listening tool” called Reddit Insights, which shares real-time insights with marketers to help them identify trends and launch campaigns. The other tool, called Conversation Summary Add-ons, allows brands to show “positive” user content under their ads.

“These are tools for a new era of community marketing, one where brands can tap into Reddit’s authenticity and connect meaningfully with high-intent communities around the world,” the company wrote.

Spotify’s Daniel Ek leads $694 million investment in defense startup Helsing

Published

8 hours ago

June 17, 2025

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Spotify's Daniel Ek leads 4 million investment in defense startup Helsing

Helsing uses AI to analyze large amounts of sensor and weapons system data from the battlefield.

Pavlo Gonchar | Sopa Images | Lightrocket | Getty Images

European defense technology startup Helsing on Tuesday said that it’s raised 600 million euros ($693.6 million) in a bumper new round of funding.

The investment was led by Prima Materia, the venture capital firm founded by Spotify CEO Daniel Ek and by Shakil Khan, an early investor in the popular music streaming app. Ek is also chairman of Helsing.

Existing investors Lightspeed Venture Partners, Accel, Plural, General Catalyst and Saab also put money in, alongside new investors BDT & MSD Partners.

Defense and the technology behind it have become a hot area for investors lately, amid major global conflicts, including the Ukraine war to Israel-Gaza. Last week saw a further escalation of war in the Middle East as Israel launched a series of airstrikes against Iran.

In 2024, venture funding in Europe’s defense, security and resilience sector reached an all-time high of $5.2 billion, according to a recent report from the NATO Innovation Fund. The sector grew 30% in the past two years, outperforming the broader VC market, which saw a 45% decline over the same period.

Founded in 2021, Helsing sells software that uses artificial intelligence technology to analyze large amounts of sensor and weapons system data from the battlefield to inform military decisions in real time. Last year, the startup also began manufacturing its own line of military drones, called HX-2.

Helsing, which operates in the U.K., Germany and France, said it would use the fresh cash to invest in Europe’s “technological sovereignty” — which refers to attempts to onshore the development and production of critical technologies, such as AI.

“As Europe rapidly strengthens its defence capabilities in response to evolving geopolitical challenges, there is an urgent need for investments in advanced technologies that ensure its strategic autonomy and security readiness,” Ek said in a statement out Tuesday.

Helsing did not disclose its new valuation following the latest financing round, which is subject to “certain approvals,” according to a statement. The firm was previously valued at around 5 billion euros in a 450 million euro funding round led by General Catalyst last year.