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

This article first appeared on GuruFocus.

Apple (NASDAQ:AAPL), a consumer-technology company producing iPhones, computers and connected devices, fell nearly 2% in Thursday’s regular-session trading before its scheduled earnings report. Analysts expect June-quarter revenue to increase 15.5% to approximately $108.65 billion, potentially representing Apple’s strongest growth for that quarter in five years. Estimated iPhone sales growth of 20.8% could provide the largest contribution to the anticipated increase.

Profit is expected to rise 18.1%, although analysts forecast Apple’s gross margin will decline to approximately 47.9%. The company has maintained iPhone prices despite higher component expenses, making pricing and margin guidance important parts of the report. Investors may also focus on demand in China and whether the current iPhone cycle can sustain growth after the anticipated June-quarter acceleration.

Apple separately introduced Apple Upgrade, a U.S. leasing program administered by Klarna, a financial-technology company providing payment services. The program offers one- or two-year leases for iPhones and Apple Watches and longer terms for Macs and iPads, with eligible customers able to exchange devices for newer models. Monthly payments start at $17.99 for an iPhone and $11.99 for an Apple Watch. The initiative could encourage more frequent upgrades and increase purchases through Apple’s direct channels, although its eventual financial contribution has not been quantified. Investors may now assess whether earnings guidance and the leasing program can offset concerns about component inflation and pressure on hardware margins.