Apple Stock Falls Nearly 2% Before Earnings as Upgrade Program Launches

Key Points:

• Apple shares dropped nearly 2% ahead of its earnings report, with analysts expecting a 15.5% revenue increase to about $108.65 billion for the June quarter, driven largely by a projected 20.8% growth in iPhone sales.
• Profit is forecasted to rise 18.1%, but gross margins are expected to decline to around 47.9% due to sustained iPhone pricing despite higher component costs, making pricing and margin guidance key investor focus areas.
• Investors will also watch demand trends in China and whether the current iPhone cycle can maintain growth following the anticipated June-quarter acceleration.
• Apple launched Apple Upgrade, a U.S. leasing program administered by Klarna, offering flexible lease terms for iPhones, Apple Watches, Macs, and iPads, aiming to boost device upgrades and direct channel sales.
• The financial impact of the leasing program remains unclear, and investors will evaluate if it and earnings guidance can counterbalance concerns about component inflation and margin pressures.