Apple Earnings Preview: China in Focus as iPhone 16 Sales Kick Off
Apple Earnings Preview: China in Focus as iPhone 16 Sales Kick Off
The company’s stock is up 6% since Aug. 1 and on track to record a sixth straight monthly gain
- Apple is scheduled to report earnings on Thursday, Oct. 31.
- Earnings and revenue are expected to grow from the year before.
- Apple trades with an implied volatility rank of 45.4 going into earnings.
Apple (AAPL) is expected to report fourth-quarter fiscal results on Thursday after the market close. A conference call is scheduled to begin at 4:00 p.m. Central.
The iPhone maker’s stock is on track to record a sixth straight monthly gain as October nears a close. The stock is up about 6% since Aug. 1, when Apple reported third-quarter results. Meanwhile, investors await Apple earnings as well as other high-profile names like Advanced Micro Devices (AMD) and Alphabet (GOOGL).
Last quarter, Apple posted a beat on earnings and revenue, posting earnings per share (EPS) of $1.40 and revenue of $85.78 billion. One drawback for last quarter was the situation in China, where revenue was weaker than expected at $14.73 billion vs. the $15.26 billion that analysts expected.
What do investors expect from Apple for the fourth quarter?
Analysts anticipate Apple will post an EPS figure of $1.60 on $94.51 billion in revenue, according to TradingView. That would be up 9.59% and 5.60% year-over-year, respectively.
The reporting quarter ended at the close of September, so the sales figures will partly reflect the releases of Apple’s latest-generation products, such as the iPhone 16 and AirPods Max. That said, much of the performance will rely on how well iPhone 15s sold.
Still, industry reports show a early iPhone 16 sales in China have been positive, which may go a long way in supporting the stock’s post-earnings performance. As previously noted, China has been a weak spot for Apple, putting it in the spotlight this quarter for investors. China’s economy has lagged against expectations.
Analyst Ming-Chi Kuo stated on X that iPhone 16 orders were cut by about 10 million units when including the three quarters from Q4 ’24 to Q2 ’25. Those cuts pertain to the lower-end models, which may end up translating to higher demand for the Pro and Pro Max models. If so, that could help to boost optimism as it pertains to China.
iPad revenue is expected to grow to about $7 billion, and services are looking at a 13% increase. While China is important, the bulk of revenue remains concentrated in North America, so the regional breakdown will also be key for the stock’s performance.
Trading Apple earnings
Apple, as of today, traded with an implied volatility rank (IVR) of 44.8, meaning volatility is relatively subdued compared to the past 12 months. The expected move priced by the options market sees a +/ 7.34-point move following earnings, which translates to a 3.13% move. That said, there isn’t too much premium priced into the options structure. Traders may choose to take a directional bet through buying a put or call if they have a directional bias.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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