Admittedly, to say Apple has something to prove in this week’s earnings report smacks of arrogance.
But there you have it. Apple (AAPL) , which sports the richest market capitalization of any stock in the world, has seen its stock struggle this year.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
The shares ended flat on Friday at $208.58, up 5.9% for the week, but the longer-term picture is more clouded. The shares are off 6.1% so far in April, and they’re down 16.7% for the year, not a pleasant picture when for a company that’s reporting fiscal-second quarter profits after Thursday’s close.
Apple faces a slew of challenges, including:
- Possible tariffs on iPhones and other devices shipped to the United States from its manufacturing complex in China.
- It may need to expand its iPhone production capacity in India to minimize the tariff hit. But none knows how fast it will take to make a new factory operational.
- Its Apple Intelligence application, launched for use on its newest iPhones, has been underwhelming.
Related: Bank of America unveils shocking Apple stock target before earnings
So, the consensus estimates for its fiscal second quarter aren’t eye-popping.
- Earnings of $1.61, up 5% from a year ago. Revenue of $94 billion, up 3.7% from a year ago.
- The main drivers this quarter may not be the iPhone, which normally accounts for 55% of revenue.
- The growth may come from the iPad and from Apple Services, including the Apple app store, the iCloud and advertising. Services is expected to generate about 28% of total revenue.
More Mag 7 earnings due this week
Four of the so-called Magnificent 7 companies report earnings this week.
Microsoft (MSFT) and Facebook parent Meta Platforms (META) report after Wednesday’s close.
Apple and Amazon.com (AMZN) weigh in after Thursday’s finish.
But earnings reports will pour out all week from some 900 U.S. companies.
Just about every company executive will have to answer questions on their businesses are affected by global and domestic economic forces and the threats they face — if any — from President Trump’s tariff proposals.
And it’s complicated because the Trump Administration keeps changing course.
So far, earnings presentations have suggested customers are anxious and spend more time considering purchases..
The president’s tariff proposal caused the Standard & Poor’s 500 Index to fall as much as 12.7% between April 2 and a reversal that hit on April 9 when the President said he was suspending most of the tariffs for 90 days.
The volatility was exacerbated when the president then indicated he might fire Federal Reserve Chairman Jerome Powell for not cutting interest rates fast enough.
In all, 11 components of the Dow Jones Industrial Average are on the calendar, along with 180 S&P 500 members . Besides the four Mag 7 companies, companies reporting include:
- Steel maker Nucor (NUE) on Monday.
- Visa (V) , Coca-Cola (KO) , Booking Holdings (BKNG) , Pfizer (PFE) and General Motors (GM) on Tuesday.
- Qualcomm (QCOM) , Caterpillar (CAT) , Canadian Pacific Kansas City (CP) , (the big railroad company) and Robinhood Markets (HOOD) on Wednesday.
- Pharmaceutical giant Eli Lilly (LLY) , Mastercard (MA) , and KKR & Co. (KKR) on Thursday.
- Exxon Mobil (XOM) , Chevron (CVX) , Apollo Global Management (APO) , Cigna (CI) Friday.
- Berkshire Hathaway (BRK.A) and (BRK.B) after Friday’s close.
FactSet’s take on the earnings season
So far, according to FactSet, the earnings have been a touch better than expected. Google-parent Alphabet (GOOGL) was actually quite a bit better than expected.
The company reaffirmed its plan to spend $75 billion on new data centers this year. Shares were up 1.8% Friday at $162.20 and are up 4.9% so far in April. They’re still down 14.3% this year.
Related: Earnings, tariff surprise send Boeing stock soaring
Tesla (TSLA) shares jumped Friday after CEO Elon Musk said he expected to spend more time with the company.
But, like Alphabet, the shares were still down 42% from their 52-week high reached in December. Earnings fell 71% from a year earlier because of weak demand and growing competition around the world.
Plus Musk’s activities with the Trump Administration have alienated many traditional Tesla buyers. Tesla shares have fallen 33.7% since Donald Trump’s inauguration.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
