Improved Trade Talks Boost Apple Business In China

Apple Business In China Is Better Due To Improved U.S. Trade Talks

Apple CEO Tim Cook said that improved relations and trade talk progress between the U.S. and China have bolstered the company’s prospects in the country, according to CNBC.

“I believe that the trade relationship — I don’t mean the tariff, I mean the tone — is much better today than it was in the November-December time frame. That affects consumer confidence in a positive way,” Cook said.

On a Q1 earnings call on Tuesday (April 30), Apple said the trade talks, a China tax cut, and iPhone financing and trade-in programs have all added up to a turnaround.

“There’s an improved trade dialogue between the U.S. and China, and, from our point of view, this has affected consumer confidence on the ground there in a positive way. And so I think it’s a set of all of these things, and we certainly feel a lot better than we did 90 days ago,” Cook said.

January saw Apple’s largest share drop in six years, due to slowing iPhone demand in China. In pre-market trading on Wednesday (April 1), though, shares were up 5 percent. Also, despite slowing iPhone sales, Apple’s earnings continue to grow.

With a top- and bottom-line beat, a stock buy-back and a stronger-than-expected guidance for Q3, there was a lot for investors to like about Apple’s March quarter earnings report. It seems they were more than satisfied with the overall results, as Apple shares spiked 4 percent in after-hours trading on Tuesday, and got within touching distance of that trillion-dollar valuation.

By the numbers, earnings clocked in at $2.46 per share, comfortably ahead of the $2.36 forecast by analysts pre-release. Revenue hit $58.02 billion, ahead of the $57.37 billion predicted by analysts. For the next quarter, Apple is looking for $52.5 billion to $54.5 billion, ahead of the predicted $51.94 billion.

The major point of concern among analysts, investors and Apple watchers was the continued decline in iPhone sales revenue. The iPhone is still Apple’s cash engine (responsible for 53.3 percent of the company’s total revenue), and its sales continue to decrease. iPhone revenue came in at $31.05 billion — more or less in line with analyst predictions, but still a 17 percent year-on-year decline.


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