This week will be packed with earnings reports from tech companies. But the most high-profile report will be Apple's (AAPL +3.26%). The tech giant reports earnings on Thursday. Given its nearly $2.7 trillion market capitalization, its report could have a big influence on the overall market.
Ahead of the iPhone maker's fiscal second-quarter earnings report, here's an overview of its recent performance and some key items to check on after the update goes live.
NASDAQ: AAPL
Key Data Points
Declining revenue
For its first quarter of fiscal 2023, Apple's revenue fell 5% year over year to $117.2 billion. Apple CEO Tim Cook said in the company's earnings call for the period that the decline was "a result of the challenging environment ..."
What, exactly, did this challenging environment consist of? One of the main contributors was a huge foreign exchange impact. Foreign exchange rate headwinds negatively impacted the company's year-over-year growth rate by about 800 basis points. Indeed, Apple would have reported year-over-year growth in most of its markets if it excluded this headwind, Cook explained during the call. Sales were also held back by supply chain challenges, which led to production of its new iPhones being substantially lower than planned during the quarter. Finally, management cited "a challenging macroeconomic environment" due to inflation, the war in Ukraine, and lingering impacts from the pandemic.
Given the continued uncertainty in the macroeconomic environment, management said it expected a similar year-over-year growth rate in its revenue in fiscal Q2.
Analyst estimates
Analysts, for the most part, seem to be in agreement with Apple's guidance. On average, they expect the tech company's fiscal Q2 revenue to fall 4.6% year over year -- a growth rate that's not too far from what Apple reported in fiscal Q1. The consensus forecast for Apple's earnings per share is $1.43 -- a 6% year-over-year decline. This year-over-year change would be an improvement from the 10.5% decline in earnings per share Apple saw in fiscal Q1.
Guidance
One number that could really move the stock when Apple reports is management's revenue outlook. The current analyst estimate calls for fiscal Q3 revenue of $84.3 billion. Importantly, this would mark a return to year-over-year growth for the company. While Apple has been avoiding providing a specific guidance figure during its earnings reports recently, it has been providing some commentary about its expectations for the direction of its revenue. During Apple's fiscal Q2 earnings call, look for the company to say it expects its revenue to return to growth in fiscal Q3.
Apple's capital return program
Finally, Apple typically uses its fiscal Q2 update to authorize more capital for share repurchases and to announce a dividend increase. Last year, Apple boosted its dividend by 5% and authorized an additional $90 billion for share repurchases. Shareholders are likely hoping Apple announces another significant increase to its share-repurchase authorization and another dividend increase.
The tech giant is scheduled to report its fiscal Q2 results after market close on Thursday, May 4. Investors will be able to find the earnings release on Apple's investor relations website.
