Apple’s bad run in the U.S., E.U., and China could see its overall revenue and earnings per share drop for the first time in almost a decade, according to a Wall Street analyst.
Ananda Baruah, an analyst at Loop Capital, cut his earnings estimates for the iPhone-maker in a note Monday, and reduced his target for the company’s stock price from $180 to $170, Barrons reported. He reiterated his Hold rating on the company’s shares.
The company’s March-quarter results are “at some risk” of not meeting Wall Street’s estimates for iPhone sales and overall revenue and profit, Baruah said. For March, Baruah sees iPhone revenue at $44 billion — below his previous prediction and expectations from Wall Street analysts. His prediction for Apple’s overall revenue is at $87.8 billion, which is below Wall Street’s forecast of $91 billion. Meanwhile, Apple’s June-quarter results are at “material risk” of missing expectations, he said.
“Simply put, iPhone unit shipments are simply too soft owing to both organic demand but also to competition,” Baruah said in his note. He added that the company is experiencing a flattening average selling price for iPhones “for the first time in years,” that is partly due to lesser product offerings “for the first time in a long while.”
iPhones sales plummeted 24% year-over-year in China for the first six weeks of 2024, with Apple facing competition from homegrown Huawei, which saw a resurgence in sales after releasing a new series of smartphones. Overall, smartphone sales in China were down 7% year-over-year during this period. Apple also got “squeezed in the middle on aggressive pricing from the likes of Oppo, Vivo, and Xiaomi,” Mengmeng Zhang, a senior analyst at Counterpoint Research, said in a statement.
“We now project Apple overall revenue and EPS (earnings per share) to decline year over year in calendar 2024 for the first time since 2016,” Baruah said in his note.
Baruah said Wall Street’s forecasts for iPhone unit sales and revenue could be 20% higher than its actual results, while predictions for the company’s overall revenue and earnings per share could be 10% higher than what Apple will report. He also noted iPhone shipments have gone back to pre-pandemic levels.
However, Baruah said Apple stock could get a bump from AI announcements at its developers’ conference in June, and sales of its Vision Pro headset. Neither Apple nor Loop Capital immediately responded to a request for comment.
Apple is currently facing an antitrust lawsuit from the U.S. Department of Justice accusing it of being anti-competitive and creating a monopoly in the smartphone market.
