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Apple shares slide despite earnings beat

Friday, February 02, 2024

Today’s headlines

What’s happening: Shares of Apple fell in after-hours trading on Thursday, following the release of the company’s fiscal first-quarter results.

What happened: The iPhone maker reported better-than-expected sales and earnings for the latest quarter.

However, Apple recorded a decline in sales in one of its key regions, which exerted pressure on its stock.

How were the results: The Cupertino, California-based company returned to year-over-year sales growth in the latest quarter after recording a contraction for four straight quarters.

  • Revenues grew by 2% year-over-year to $119.6 billion, which topped Wall Street expectations of $117.9 billion.
  • Earnings came in at $2.18 per share, beating the consensus estimates of $2.10 per share.

Why it matters: Investors have been concerned about Apple’s flagship product losing popularity in China, one of the major Asian markets. Consumer in China seem to be preferring foldable mobile devices from domestic smartphone maker Huawei.

During the latest quarter, Apple’s sales in China declined 12.9% year-over-year to $20.82 billion and came in below market expectations of $23.53 billion.

Apple’s iPhone generated revenues of $69.7 billion, rising by 6% to top market estimates of $67.82 billion. The sales growth was driven by strength in sales of the company’s iPhone 15 devices.

Sales of the remaining product categories, including Mac, iPad and Wearables, Home and Accessories also came in-line with the guidance. Apple’s Mac sales rose slightly to $7.78 billion, while sales of iPads fell 25% to $7.02 billion. Revenues from Apple’s Wearables, Home and Accessories unit fell 11% to around $12 billion.

The company’s board declared a cash dividend of 24 cents per share, payable on February 15.

Management guided to revenues of around $90 billion and iPhone sales of approximately $46 billion for the fiscal second quarter.

How shares responded: Apple’s shares fell 2.9% to $181.45 in the extended trading hours, following the release of quarterly earnings. The stock has gained around 24% over the past year.

What to watch: Investors will continue monitoring the sales of iPhone and Apple’s performance in China. The company is also set to officially commence the sales of its Apple Vision Pro headset on Friday.

The markets today

Gold will be in focus today ahead of the much-awaited jobs data from the US

Context: Gold prices moved higher on Thursday, following the US Federal Reserve’s interest rate decision.

Details: Late Wednesday, the Federal Reserve announced its decision to keep interest rates unchanged. Policymakers also indicated that they will likely maintain rates higher for longer.

Fed chief Jerome Powell said it was too early to consider cutting interest rates, especially in March. Comments from the Fed Chairman resulted in a sharp reversal in risk-driven assets, particularly equities, on Wednesday. This, in turn, raised the demand for safe-haven assets, like gold. Powell’s remarks also raised speculations of the US central bank beginning to cut interest rates only by May.

Ongoing geopolitical concerns also lent support to the yellow metal. Weakness in the US dollar also provided a boost to gold prices. A lower US dollar makes assets priced in the greenback cheaper for foreign currency holders.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell more than 0.2% to 103.05 on Thursday.

Gold for April delivery gained $3.70 to close at $2,071.10 per ounce.

In other metals trading, silver for March delivery added 7 cents to $23.24 per ounce, March copper declined 6 cents to $3.85 per pound, platinum fell to $922.3, and Palladium dipped to $971.60 on Thursday.

What to watch: Investors await the release of the jobs report from the US today. The US economy, which added 216,000 jobs in December, is expected to report 180,000 job adds in January.

Analysts expect the unemployment rate to rise to 3.8% in January, from 3.7% in December, while average hourly earnings are projected to increase 0.4%, following a 0.4% rise in the previous month.

Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.97%, 1.25% and 1.21%, respectively.

The news shaping the markets

European Union leaders agreed on an aid package of €50 billion for Ukraine. The news sent the RUB/USD pair slightly lower this morning.


South Korea’s consumer price index eased to 2.8% year-over-year in January, from 3.2% in the prior month, lending support to the KRW/USD forex pair.


Australia’s final demand producer price index rose by 0.9% during the fourth quarter, compared to a 1.8% increase in the prior quarter, which sent the AUD/USD pair higher in forex trading this morning.


New Zealand’s building permits increased by 3.7% to 2,487 units in December, compared to a 2.7% decline in the prior month, which lent support to the NZD/USD forex pair.


Colombia’s Davivienda manufacturing PMI rose to 55.1 in January, from 52 in the prior month. The latest reading signalling an expansion in the country’s manufacturing sector for the second straight month sent the COP/USD pair higher in forex trading this morning.

What else to watch today

France’s industrial production and government budget value, Brazil’s IPC-Fipe inflation and industrial production, Spain’s unemployment change and tourist arrivals, Mexico’s foreign exchange reserves and gross fixed investment, India’s foreign exchange reserves, Singapore’s manufacturing PMI, US factory orders, University of Michigan’s consumer sentiment, Baker Hughes crude oil rigs, Baker Hughes total rigs and total vehicle sales, Argentina’s tax revenue and interest rate decision, as well as Turkey’s total vehicle sales, balance of trade, exports and imports.


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