Kyle Prevost, creator of 4 Steps to a Worry-Free Retirement, Canada’s DIY retirement planning course, shares timely financial headlines and provides context for Canadian investors.
Apple earnings are solid if not spectacular
When a company has a long track record of record-breaking growth, it can be difficult to place each earnings report in perspective. All earnings figures in the first two sections are shown in U.S. dollars.
Apple released its quarterly earnings this week. The company reported earnings per share of $1.46 (versus $1.39 expected) and total revenue of $89.5 billion (versus $89.28 billion expected). Despite modestly beating estimates, Apple shares fell about 3% in after-hours trading, reflecting market expectations that are particularly high for this company.
It helps to remember just how large Apple is. A few performance highlights put that scale in perspective:
Apple performance highlights
- Apple holds more than $162 billion in cash on hand, which generates a significant amount of interest income annually—comparable to the annual profits of some of Canada’s largest corporations.
- Apple’s AA+ credit rating reflects a perception that it is highly likely to meet its debt obligations, a stronger rating than many provinces and several countries.
- Even if Apple sold only iPhones, its iPhone revenue alone would exceed the total sales of many large companies by multiple times.
- Apple’s market capitalization is comparable to the value of the entire Canadian stock market, underscoring how influential a single U.S. tech giant can be in global markets.
Given that scale, Apple often seems to operate by its own rules. The company’s total sales have declined for a fourth straight quarter, which is understandable after a pandemic-driven surge in consumer electronics purchases. Apple’s CEO described the market for personal computers as “challenging,” reflecting softer demand in that segment.
Apple’s third quarter highlights
- iPhone revenue: $43.81 billion (in line with expectations)
- Mac revenue: $7.61 billion (below expectations of $8.63 billion)
- iPad revenue: $6.44 billion (above expectations of $6.07 billion)
- Wearables revenue: $9.32 billion (slightly under expectations)
- Services revenue: $22.31 billion (above expectations)
- Gross margin: 45.2% (above the expected 44.5%)
How about the rest of Tech?
Overall, U.S. tech companies delivered another generally solid quarter.
Tech round-up earnings highlights
All figures below are in U.S. dollars.
- Airbnb: Earnings per share of $6.63 (helped by a one-time tax benefit) and revenue of $3.40 billion, roughly in line with expectations.
- PayPal: Earnings per share of $1.30 and revenue of $7.42 billion, both modest beats versus forecasts.
- AMD (Advanced Micro Devices): Earnings per share of $0.70 and revenue of $5.8 billion, slightly above estimates.
- Qualcomm: Earnings per share of $2.02 and revenue of $8.67 billion, both ahead of expectations.
The unusually large profit figure for Airbnb stemmed from a one-time tax benefit worth several billion dollars, which inflated quarterly net income; the company’s underlying revenue trends were largely in line with analysts’ forecasts.
In short, hardware and software companies continue to channel profits back to U.S.-based shareholders as global demand and pricing dynamics favor established tech platforms.
Air Canada and Cameco fly high
Some Canadian companies delivered notable quarterly results this week, each driven by distinct industry dynamics. Air Canada expressed strong confidence about near-term demand. Mark Galardo, the airline’s executive vice-president of network planning and revenue management, said the company sees healthy demand across most geographies and customer segments and is not observing a major slowdown at this time.
Canadian earnings highlights
- Air Canada (TSX: AC): Earnings per share of $2.46 (versus $1.60 expected) and revenue of $6.34 billion (versus a $6.09 billion estimate).
- Cameco (TSX: CCO): Earnings per share of $0.32 (versus $0.13 expected) and revenue of $575 million (versus $718 million estimated).
- Nutrien (TSX: NTR): Earnings per share of USD $0.35 (versus $0.65 expected) and revenue of USD $5.37 billion (versus $5.74 billion estimated).
Despite Air Canada’s positive results, its share price closed slightly lower on investor skepticism about the durability of the rebound. Cameco’s results were framed more as a commentary on the broader role of nuclear power in energy policy than a deep operational update. Its CEO highlighted how policymakers are increasingly including nuclear energy in plans to meet net-zero and emissions reduction targets, a shift that supports long-term demand for the industry.
Following the report, Cameco’s stock was roughly flat on the day of the release but rose about 10% over the week. Nutrien’s weaker quarter reflects volatility in potash prices and increased global supply from producers outside typical sanction zones, which has pressured the company’s pricing power. As a near-pure play on potash, Nutrien’s results are closely tied to supply-and-demand swings in that specific commodity market.
The U.S. Fed tones down hawkishness
The U.S. Federal Reserve remains the dominant driver of market sentiment. At its most recent meeting, the Federal Open Market Committee chose to hold the federal funds rate steady for a second consecutive meeting, keeping the target range at 5.25% to 5.50% after 11 rate increases since March 2022.
Chair Jay Powell’s language was slightly less hawkish, suggesting policymakers will proceed “carefully” with future decisions. He reiterated the Fed’s commitment to achieving a level of monetary policy restrictive enough to bring inflation down to 2% over time, while noting that the committee is not yet confident it has reached that stance. Asked about cutting rates, Powell said that a pivot to easing is not currently under discussion.
These comments came against a backdrop of surprisingly strong U.S. economic data. A recent jobs report showed roughly 9.55 million job openings and about 1.5 job openings for every unemployed person—an elevated ratio compared with pre-pandemic levels. Combined with a very strong GDP print that showed nearly 5% annualized growth, the data add pressure on the Fed to avoid easing too quickly for fear of reigniting inflation.
That mix—higher-for-longer interest rates alongside robust growth and a tight jobs market—continues to shape global markets and investor expectations. For Canadian investors, understanding how these U.S. developments flow through to currency, bond yields, and equity valuations remains essential to informed portfolio decisions.