Apple Q1 Earnings Preview: Retail Braces For Blowout Quarter After Analysts Temper Their Expectations

Apple is widely expected to report single-digit earnings per share and revenue growth for the first quarter of fiscal year 2025.

Apple Q1 Earnings Preview: Retail Braces For Blowout Quarter After Analysts Temper Their Expectations

Apple, Inc. (AAPL) stock edged down on Thursday ahead of the tech giant’s quarterly report, due after the market close. Given the bad tidings are largely factored in following downward estimate revisions by most Wall Street analysts, even an in-line result could set off a stock rally.

Apple stock fell 0.03% to $239.30 by mid-session. It has lost about 4.42% so far in January, reversing part of the 31% gain it notched up in 2024.

The stock showed resilience amid the DeepSeek-inspired tech sell-off seen earlier this week. 

Q1 Expectations

Apple is widely expected to report single-digit earnings per share and revenue growth for the first quarter of fiscal year 2025. The first quarter is Cupertino's seasonally strongest quarter, as it encompasses the key holiday selling season.

On average, analysts expect December quarter earnings per share (EPS) of $2.35, up from $2.18 a year ago. Revenue is expected to climb about 4% year-over-year (YoY) to $124.26 billion. The company had guided to low to mid-single revenue growth for the quarter, double-digit Service revenue growth, and a 46%- 47% gross margin. 

In the run-up to the quarterly results, several analysts reduced their estimates and stock price targets, blaming the predicament on China weakness and the slow rollout of Apple Intelligence features globally. 

But Apple bulls like Wedbush’s Daniel Ives think the bear frenzy around Apple is way overdone. The analyst sees the overall China weakness as manageable due to strength elsewhere, helping the company to hit December quarter goals. 

Apple’s Businesses

The Street estimates for Apple’s business segments sourced via Morgan Stanley are as follows:

  • iPhone: $70.82 billion (assuming 77,342 units and average selling price (ASP) of $928)
  • iPad: $7.42 billion
  • Mac: $7.98 billion
  • Wearables, Home & Accessories: $12.11 billion
  • Services: $26.04 billion

 

Morgan Stanley analyst Erik Woodring said the firm’s latest checks pointed to stable iPhone builds in the first quarter. The analyst expects incremental forex headwinds to impact iPad and Mac ASPs, but he sees strong Mac demand offsetting some of the weakness.

The analyst said Apple would likely disclose active device installed base of 2.3 billion and iPhone installed base of 1.4 billion.

Q2 Outlook

Wall Street currently estimates fiscal 2025 second quarter EPS of $1.65 and revenue of $95.37 billion. The consensus estimates for the full year are $7.35 and $411.5 billion, respectively.

Woodring holds a muted outlook, expecting the company to guide the March quarter down due to continued iPhone demand weakness and the forex becoming a two-point headwind.

However, the analyst said subpar guidance is already priced in, and therefore, he expects the stock to find floor at $210-$220.  

Retail Sentiment

On Stocktwits, retail sentiment toward Apple stock stayed ‘bullish’ (63/100), although the degree of bullishness waned from a day ago. Message volume remained at ‘high’ levels.

aapl-sentiment.png AAPL sentiment and message volume January 30, as of 2:26 pm ET | Source: Stocktwits

Most stock watchers on the platform are bracing for a positive surprise that would result in a rally. Incidentally, Apple’s stock pulled back in the session that followed each of the past four earnings release dates.

According to TipRanks, the average analyst price target for Apple stock is $243, indicating less than a 2% upside from current levels. 

For updates and corrections, email newsroom[at]stocktwits[dot]com<

Latest Videos
Follow Us:
Download App:
  • android
  • ios