Core Viewpoint - Apple is set to report its earnings for the first quarter of 2025, which will provide insights into the effects of the U.S.-China trade war on its operations, although analysts believe many questions will remain unanswered [1][5]. Financial Performance - Apple is expected to generate $94.4 billion in revenue and $1.62 earnings per share, translating to a net income of $24.3 billion, indicating a year-over-year revenue growth of 4% and earnings growth of 3% [2]. - Sales in the Americas region are projected to grow by 6% to $39.7 billion, while services revenue, which includes the App Store, AppleCare, and AppleTV+, is anticipated to increase by 12% to a record $26.7 billion [3]. Market Dynamics - Analysts predict flat annual growth for iPhone sales at $46 billion, indicating potential challenges in the smartphone segment and Greater China revenue [3]. - There may have been a "pull forward in demand" as consumers anticipated tariffs, which could have positively impacted Apple's performance during the quarter [4]. Geopolitical Context - The earnings report will not reflect the significant policy changes in April, including the reduction of tariffs on Chinese smartphone imports from 145% to 20%, which has lessened the projected tariff impact on Apple [6]. - Apple's CEO Tim Cook has been in discussions with the White House regarding these tariff changes, which are crucial given that approximately 90% of iPhones are assembled in China and 17% of Apple's revenue comes from the Greater China segment [6]. Legal Challenges - Apple faced a legal setback when a federal judge ruled that the company violated a court order regarding fees on purchases made outside of iOS apps, leading to a 1.5% decline in its stock premarket [9].
Apple Earnings Come Out Today: What To Watch As IPhone Maker Steps Through Tariff ‘Minefields'