Wesley Hilliard
Earnings for what may be Apple's last quarter without massive tariffs, that saw releases of iPhone 16e, updated Macs, and new iPads will be announced on May 1, followed by a conference call.
Apple's first quarter isn't always the most exciting one for the company, as the holiday quarter is tough to follow. However, there may be a mild boost to some categories when compared year-over-year thanks to new product releases.
An Investor Relations post from Apple revealed that the earnings for fiscal quarter two would be shared on April. As always, the earnings call will follow shortly after where executives will discuss the earnings and answer analyst questions — and we're expecting a huge amount of questions about how Apple will handle the tariff situation.
After two full quarters into iPhone 16 and Apple Intelligence, eyes will also be on the iPhone portion for signs of waning demand. There's little chance that the recently announced AI feature delay will have had enough time to impact the quarter, and iPhone 16e could help boost the numbers.
Apple released a few products during the quarter, but iPhone 16e was the only one with a majority of the quarter to generate sales. The new Macs and iPads could help those numbers, but they didn't ship until March 12.
The MacBook Air with M4 will likely prove as popular as ever thanks to its new lower $999 price for the latest model. M3 models released less than a year prior, so the demand for those products may not have had time to decline prior to the quarter.
The third entry devices released in the quarter was the iPad A16 — 11th-generation model. The base iPad is always a strong seller, but the new model is a small spec bump that lacks Apple Intelligence and likely won't drive demand.
The iPad Air got the M3 chip, and like the iPad 11, it's a popular model that sells throughout the year. Mac Studio got upgraded with M4 Max and M3 Ultra, but the niche product is expensive.
Regardless, all these products besides the iPhone 16e likely had little, if any, effect on the overall earnings. They might help improve compares slightly year-over-year, but don't expect any records.
And, President Trump's tariffs were announced well after the quarter ended. Earnings will not be impacted at all by them, nor from panic-buying of iPhones and other hardware.
AppleInsider will have a breakdown of the earnings report and the call as always.
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8 Comments
I'm guessing we'll hear the word headwinds many times during this call. Other question of interest is what they'll do with dividends. Most seem to think up it by one penny like they did last year. I'm hoping for two pennies.
As much as I would like to see the dividend increase, with the upcoming tariffs I think it is the wrong time to increase dividends. In fact, I would not be surprised if there is a decrease coming either this quarter or next to offset some of the tariffs.
For sure "headwinds" will be mentioned in the analyst conference call.
I'm less confident that Apple will reduce dividends and very doubtful they will increase them. The more likely scenario is to keep dividends the same for at least one quarter to see how things settle out.
Apple's dividends are so small percentage-wise that a slight trimming of dividends isn't going to make any significant offset due to increased tariffs.
And if Apple immediately slashes the dividend payout it will draw scrutiny and criticism from pension plan and retirement fund administrators, not just retail investors. It will also open the door for the rest of the Fortune 500 to reduce their dividend payouts which is far more serious than just Apple saying it. Apple's senior management knows this.
If Apple wants to maintain their profitability, they will need to pass the tariffs onto consumers. One thing we can expect is to see are tariffs as a separate line item in their financial reports as they will now be sizable enough to affect the company's finances. Until now, there has been a tax item in these numbers.
Unless something changes in the next 22 days, headwinds will be an understatement.
I'm sure the dividend payout will remain the same- a comment above mine says, lowering it would arouse even more panic. What I would hope to hear is how they plan to navigate the issue of tariffs- How much production can be moved to countries where the tariff is lower, etc. Will prices of services go up to help provide more income to soften the blow on the hardware side?
While I would doubt this will happen, since it's just not Apple's style, I want to see any price increase in the store itemize EXACTLY how much of it is a result of the tariffs.
Sort of like:
iPhone 16 Pro Max 256GB: $1099
Trump Tariff: $ 400
Final Price (exc. Sales Tax): $1499
In fact, every single product sold in this country, from every company should do the same. Let people see exactly how much the man in the White House is costing us.
I still think Apple will up the dividend just to keep their streak going. But there is always the chance it could be a half penny rather than a full one. I remember after a split a few years ago that the dividend was $0.205 for at least one quarter (can't actually remember if it was the entire year or not).