What to expect from Apple's revenues

Investors will examine closely whether sales of Apple's flagship product, the iPhone, are slowing faster than expected. In the last quarter, a 17% drop in iPhone revenues resulted in a 5% drop in total sales of the technology technician. Sales of the iPhone and the entire company could be worse in the month of June and in the future, as the trade war between the United States and the United States China will integrate into the main business areas of Apple.

Investors will also look at prices. Any sign of deteriorating consumer pricing power of the iPhone could indicate that Apple is losing its trademark luster. At the same time, competitors such as Samsung and lower-cost Chinese competitors such as Huawei Technologies are gaining ground, a sign that more and more consumers are reluctant to pay market average retail prices that are higher than those of the market. Apple has always asked for its iPhone models.

The financial figures are likely to be sobering for the third fiscal quarter ending in June. Analysts expect a profit of 2.10 dollars per share, according to the 35 analysts surveyed by Yahoo Finance. This estimate reflects a decrease of 10.3% compared to the corresponding quarter of the previous fiscal year, EPS of 2.34 USD. Revenue for the third fiscal quarter is expected to be $ 53.4 billion, virtually unchanged from the previous year.

Despite these less than robust numbers, many analysts are confident that Apple's service revenues will be able to take over. "Service growth is essential to boost Apple's overall business figure, as well as potentially to stabilize the company's overall gross margins, which have plummeted over the past five years," he said. wrote the Bernstein analyst Toni Sacconaghi, quoted in a recent article by Barron. According to Sacconaghi, Apple can extend the double-digit growth of services by 3 to 5 years.

In the last quarter, Apple's iPhone business accounted for 63% of revenue, compared with 14% for services, which grew by 16%. And services should account for a larger percentage of sales because the company doubles its activities such as digital subscriptions, advertising in the App Store and its own on-demand streaming service, Apple TV.

Another important factor that could continue to weigh on Apple's earnings, and therefore on the stock price, is the escalation of trade tensions between the United States and China. In the second quarter of the year, Apple's sales in China, a key market representing approximately 20% of total sales, dropped by 22%. And some analysts believe that these sales could fall even more strongly if the trade war continues.