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What to Expect from Apple's Earnings, iPhone, Services & Chinese Revenues

Benjamin Rains

Apple AAPL is set to release its Q1 fiscal 2019 financial results after the closing bell Tuesday. Wall Street will be watching the tech powerhouse closely after it lowered its quarterly guidance for the first time in over 15 years earlier this month on the back of slowing Chinese growth and subdued iPhone sales.

Overview

CEO Tim Cook significantly lowered Apple’s quarterly revenue guidance based on slower sales in emerging markets—mostly Greater China—and fewer iPhone upgrades. With that said, our current Zacks Consensus Estimate calls for Apple’s quarterly revenues to fall 4.75% to touch $84.1 billion. For reference, Apple’s revenues climbed 20% last quarter and popped 13% in the year-ago period. Meanwhile, AAPL’s adjusted quarterly earnings are expected to jump 7.2%.

iPhone

Moving on, it’s time to see what investors should expect from some of Apple’s key businesses, as their performances could determine how AAPL stock trades.

Apple’s Q1 iPhone revenues are projected to come in at $52.264 billion, based on our current NFM estimate. This would mark a roughly 15% decline from the prior-year quarter’s $61.576 billion.

On top of that, iPhone unit sales are expected to fall approximately 15% from 77.316 million to 65.425 million. Apple’s flagship smartphone revenues soared 29% last quarter even though iPhone unit sales came in flat because the last year has presented Apple favorable year over year comparisons based on higher-priced iPhones.

China

Apple’s revenues in Greater China are projected to fall 4.5% from $17.956 billion in the year-ago quarter to $17.129 billion. This would mark a significant downturn from Q4’s 16% expansion and Q1 2018’s 11% climb.

China accounted for 18% of Apple’s revenues in each of the last two quarters. Therefore, as the Chinese economy slows down, Apple’s high-priced iPhones might be even harder to sell in a country that has a ton of more affordable smartphone offerings.

Services

Apple’s services business, which is comprised of Apple Pay, Apple Music, and more, is expected to soar over 27% to reach $10.819 billion. This would come in above Q4’s 17% expansion and the unit’s 25.5% average growth over the trailing six quarters.

Other Products

Along with Apple’s closely watched services business, Apple’s “other products” unit features Apple Watch, Apple TV, Beats products, and more. This division is projected to surge 38% to reach $7.548 billion, which would beat the trailing six period’s 33.5% average expansion.

Bottom Line

Apple is set to release its Q1 fiscal 2019 earnings results after the market closes Tuesday. So, make sure to head back to Zacks for a complete breakdown of Apple’s actual quarterly financial results.

Facebook FB, Microsoft MSFT, Tesla TSLA, Boeing BA, McDonald’s MCD, Amazon AMZN, Alibaba BABA, and others giants all report their quarterly earnings results later this week as well.

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