Apple earnings updates: Wall Street watching for trade-war impact, iPhone production

One day before earnings, Apple lost a key legal battle over its App Store rules. A federal judge ruled that Apple violated a 2021 court order by making it too hard for app developers to point users to alternative payment options — and by slapping a 27% fee on outside purchases.

The judge even referred Apple and one of its executives to federal prosecutors for potential criminal contempt, saying they may have misled the court.

It's a blow to Apple's high-margin Services business, which includes the App Store, and has been a major source of growth. Expect analysts to ask how this could impact revenue and whether Apple will be forced to loosen its grip on developers.

— Pranav Dixit

JPMorgan said Apple's second-quarter results should remind investors just how resilient the iPhone maker is amid rising macroeconomic uncertainties.

The bank increased its quarterly revenue estimates for the company by more than $2 billion, to $95.8 billion from $93.5 billion, partly due to the company's likely increased sales ahead of potential tariffs.

Analysts also said Apple's stock price decline this year de-risks it to a degree, with its price now more attractive for investors. Apple stock is down 15% year-to-date.

The bank issued an "Overweight" rating on the stock with a $245 price target, implying a 14% upside from its current level.

Apple's earnings come amid rising US-China tensions, sparked by President Donald Trump's tariffs of up to 145% on imports from the country. The trade war poses risks for Apple, which makes about 90% of its products in China.

To mitigate those risks, Apple is reportedly accelerating its shift to India, aiming to significantly ramp up iPhone production there by 2026. But analysts caution that manufacturing in India costs Apple 5% to 8% more than it does in China, potentially squeezing margins and adding logistical hurdles.

Expect investors to press Apple executives on how quickly and efficiently they can scale operations outside China.

— Pranav Dixit

Analysts at Goldman Sachs said investors will be looking to hear answers to six key questions:

1. How will tariffs impact margins and demand?
2. How has the recently launched iPhone 16e performed?
3. What are Apple's new product releases for the rest of 2025?
4. How has Apple's competition in China evolved?
5. What's next for Apple Intelligence?
6. How could Google's antitrust lawsuit impact Apple's revenue?

As for the actual results, Goldman analysts expect Apple to beat earnings per share expectations of $1.61 and revenue expectations of $94.0 billion in the quarter.

Second quarter

• Revenue estimate: $94.62 billion

• Products revenue estimate: $67.84 billion

  • IPhone revenue estimate: $45.82 billion
  • Mac revenue estimate: $7.77 billion
  • IPad revenue estimate: $6.15 billion
  • Wearables, home and accessories estimate: $8.05 billion
• Service revenue estimate: $26.72 billion
• Greater China rev. estimate: $16.83 billion
• EPS estimate: $1.62
• Operating cash flow estimate: $32.59 billion
• Total operating expenses estimate: $15.17 billion
• Gross margin estimate: $44.58 billion
• Cash and cash equivalents estimate: $32.73 billion
• Cost of sales estimate: $50.23 billion
• Total current assets estimate: $138.29 billion
• Total current liabilities estimate: $132.99 billion

Third quarter

• Capital expenditure estimate: $2.55 billion

Full-year 2025

• Capital expenditure estimate: $10.77 billion

Source: Bloomberg