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Apple reports — What to know in markets Tuesday

Heidi Chung

Apple (AAPL) will take center stage Tuesday.

The iPhone maker is scheduled to release fiscal second-quarter financial results after the closing bell. Apple is expecting to report softer sales compared to the same period last year; however, despite all of the bad news recently, the stock has been on a tear this year and is within striking distance from the key $1 trillion market cap level.

Apple lowered its outlook ahead of its second-quarter results and is now is expected to report earnings of $2.37 per share on $57.49 billion in revenue, according to data compiled by Bloomberg. Investors will be focusing on revenue from Apple’s Services business as well as performance in China during the quarter. During the fiscal first quarter, sales in China tumbled by nearly 26% to $13.17 billion. Sales in China accounted for more than 15% of Apple’s total revenue in the first quarter. The Cupertino-based company no longer releases unit sales for its products, but it does reveal product revenue. Product revenue increased for all of Apple’s products with the exception of the iPhone. During the holiday quarter, iPhone sales declined 15% year over year.

A man tries out a latest iPhone next to iPhone 8 and 8 Plus on display for sale at an Apple Store in Beijing, Tuesday, Dec. 11, 2018. U.S. chipmaker Qualcomm says it's won an order in a Chinese court banning some Apple phones in China as part of a long-running dispute over patents. Qualcomm said Monday that the Fuzhou Intermediate People's Court in China has granted preliminary injunctions ordering four Chinese subsidiaries of Apple to stop selling and importing iPhones. (AP Photo/Andy Wong)

Meanwhile, headed into second quarter earnings, Wall Street seems pretty optimistic.

Dan Ives, Wedbush’s tech analyst, is predicting a bright earnings report. “We are expecting at least an in-line quarter and likely a beat on stronger iPhone revenues as China consumer demand rebounded,” Ives wrote in a note Friday.

Morgan Stanley analyst Katy Huberty thinks Apple’s revenue will come in at the high end of management’s previous guidance. “We continue to believe that Apple will report March quarter revenue at the high end of management’s $55B-59B guidance range after F2Q iPhone activation data in China showed improving market share in January that continued into February and March but wasn’t fully baked into management’s revenue guidance,” Huberty wrote in a note to clients on March 24. Huberty raised her price target on Apple stock from $220 to $234, which is about a 14% move higher from Monday’s closing price.

Other notable earnings scheduled for Tuesday include Blue Apron (APRN), ConocoPhillips (COP), Eli Lilly (LLY), General Electric (GE), Incyte (INCY), Mastercard (MA), McDonald’s (MCD), Merck (MRK), Pfizer (PFE), Shopify (SHOP) before market open, and Advanced Micro Devices (AMD), Amgen (AMGN), Apple (AAPL), Groupon (GRPN), Mondelez (MDLZ), Twilio (TWLO) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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