Apple’s revenue grew by 4% in its first fiscal quarter, but the company fell short of Wall Street’s expectations for iPhone sales. Sales in China also dropped by 11.1%, according to the report released on Thursday. Despite this, Apple’s stock remained steady in after-hours trading.
Here’s how Apple’s performance compared to analysts’ predictions for the quarter ending December 28:
- Earnings per share: 2.40(vs.2.40(vs.2.35 estimated)
- Revenue: 124.30billion(vs.124.30billion(vs.124.12 billion estimated)
- iPhone revenue: 69.14billion(vs.69.14billion(vs.71.03 billion estimated)
- Mac revenue: 8.99billion(vs.8.99billion(vs.7.96 billion estimated)
- iPad revenue: 8.09billion(vs.8.09billion(vs.7.32 billion estimated)
- Other Products revenue: 11.75billion(vs.11.75billion(vs.12.01 billion estimated)
- Services revenue: 26.34billion(vs.26.34billion(vs.26.09 billion estimated)
- Gross margin: 46.9% (vs. 46.5% estimated)
While Apple’s overall revenue increased, iPhone sales dipped slightly compared to the same period last year. This quarter was the first full quarter with iPhone 16 sales, and Apple also introduced its new AI features, called Apple Intelligence, during this time. However, the iPhone sales miss was the biggest in two years, partly due to weaker demand in China.
China Sales Drop
Sales in Greater China (mainland China, Hong Kong, and Taiwan) fell by 11.1% to $18.51 billion. This is the biggest drop since the same quarter last year, when sales fell by 12.9%. Apple CEO Tim Cook explained that half of the decline was due to changes in inventory management, while the lack of Apple Intelligence in China and a new national subsidy for tech products also played a role.
Cook also noted that iPhone sales were stronger in countries where Apple Intelligence is available. Currently, the AI features are only available in a few English-speaking countries and are not accessible in China.
Strong Growth in Mac and iPad Sales
Apple’s Mac and iPad sales saw strong growth during the holiday quarter. Mac revenue rose 15% to 8.98billion,andiPadrevenuegrew158.98billion,andiPadrevenuegrew158.08 billion. This was the best growth for Mac sales since late 2022. Cook credited the success to the excitement around new products like the updated iMac, Mac Mini, and MacBook Pro, as well as the new iPad Mini.
Services Division Continues to Shine
Apple’s Services division, which includes subscriptions, warranties, and app sales, brought in $26.34 billion, up 14% from last year. Cook highlighted that Apple now has over 1 billion subscriptions, including services like Apple TV+ and iCloud, as well as third-party apps sold through the App Store.
Wearables and Other Products Decline
Sales in the “Other Products” category, which includes Apple Watch, AirPods, and Vision Pro, dropped 2% to $11.75 billion.
Dividends and Share Buybacks
Apple announced a dividend of 25 cents per share and revealed it spent $30 billion on dividends and share repurchases during the quarter.
Looking Ahead
Apple didn’t provide specific guidance for the next quarter, but Wall Street expects earnings of 1.66pershareandrevenueof1.66pershareandrevenueof95.46 billion. The company’s net income for the quarter was $36.33 billion, up 7.1% from the same period last year.