Apple’s shares gain on upbeat earnings and outlook

Today’s headlines

What’s happening: Shares of Apple rose in after-hours trading on Thursday following the release of quarterly results.

What happened: The iPhone maker posted stronger-than-expected sales and earnings for the second quarter.

Apple issued a strong revenue forecast for the current quarter despite continuing to face supply issues for chips.

How were the results: The Cupertino, California-based company reported low double-digit sales growth for the quarter.

• Revenues grew 17% year-over-year to $111.18 billion, topping consensus estimates of $109.66 billion.
• Earnings came in at $2.01 per share, surpassing Wall Street expectations of $1.94 per share.

Why it matters: Revenues from iPhone, Apple’s best-selling item for almost 20 years, surged to $56.99 billion from $46.84 billion in the year-ago period. However, the figure fell short of market estimates of $57.21 billion.

CEO Tim Cook said iPhone sales were hurt by supply issues for advanced processor chips.

Services revenue rose to $30.98 billion. Sales of iPads came in at $6.91 billion, above market estimates of $6.66 billion, while sales of wearables stood at $7.9 billion, versus expectations of $7.7 billion.

The company garnered sales of $20.5 billion from greater China, topping market estimates of $19.45 billion.

Apple also announced a 4% dividend increase and an additional share buyback authorisation of up to $100 billion.

The company guided to revenue growth of 14%-17% for June quarter, significantly higher than market estimates of 9%. Management also guided to gross margins of 47.5%-48.5%, indicating continued cost discipline and pricing power.

Cook warned, however, that the company could feel the impact of “significantly higher memory costs” beyond the June quarter.

How shares responded: Apple’s shares surged 2.5% to $278.01 in extended trading hours on Thursday following the release of quarterly results. The stock has jumped around 7% over the past month.

What to watch: Investors will keep an eye on the company’s iPhone sales and Apple’s plans for Siri, which it is looking to improve with Google’s technology.

Apple is also scheduled to hold its annual software developer conference next month, where investors expect the company to share details of its AI plans.

The markets today

The Canadian dollar in focus today ahead of manufacturing PMI data

Context: The Canadian dollar gained versus the US dollar this morning as investors digested the latest economic data.

Details: Data released on Thursday showed that Canada’s gross domestic product came in unchanged versus the previous month in March, according to a preliminary reading. This signalled that higher energy prices had impacted overall spending in the country. Canada’s GDP grew by 0.2% in February, in-line with estimates. Advance data showed that the economy is expected to expand by 0.4% in the first quarter.

Wages in Canada rose 3.4% year-over-year in February, versus a previous reading of 1.93% growth.

Higher prices of crude oil, one of Canada’s major exports, lent support to the loonie. Spot prices for WTI crude oil rose around 0.1% to $107.90 per barrel this morning.

Strength in the US dollar weighed on the Canadian dollar this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.1% to 98.15.

The USD/CAD pair edged lower to 1.3579 this morning.

What to watch: Investors will continue monitoring developments around to the US-Iran war.

Data on Canada’s S&P Global manufacturing PMI (1730 UAE Time) will be released today. The S&P Global Canada manufacturing PMI, which declined to 50.0 in March from 51.0 in the previous month, is expected to fall further to 48.5 in April.

Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.62%, 1.02% and 0.98%, respectively.

The news shaping the markets

Ukraine’s drones hit an oil facility in the city of Perm in central Russia. The news sent the USD/RUB pair lower in forex trading this morning.

Australia’s S&P Global manufacturing PMI rose to 51.3 in April from a flash reading of 51.0. The latest reading coming in higher than the previous month’s 49.8 lent support to the AUD/USD forex pair.

New Zealand’s building consents for new dwellings declined 1.3% in March, following 2.8% growth in February, which sent the NZD/USD pair lower in forex trading this morning.

Colombia’s unemployment rate declined to 8.8% in March from 9.2% in the previous month, exerting pressure on the USD/COP forex pair.

South Korea’s trade surplus rose to $23.77 billion in April from $4.88 billion in the year-ago month. However, the USD/KRW pair rose slightly in forex trading this morning.

What else to watch today

UK’s mortgage approvals (1230 UAE Time), mortgage lending (1230 UAE Time), M4 money supply (1230 UAE Time), net lending to individuals (1230 UAE Time), consumer credit (1230 UAE Time) and S&P Global manufacturing PMI (1230 UAE Time), India’s bank loan growth (1530 UAE Time), deposit growth (1530 UAE Time) and foreign exchange reserves (1530 UAE Time), as well as US S&P Global manufacturing PMI (1745 UAE Time), ISM manufacturing PMI (1800 UAE Time), ISM manufacturing employment (1800 UAE Time), ISM manufacturing new orders (1800 UAE Time), ISM manufacturing prices (1800 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time).