Apple’s Quarterly Report Exceeds Expectations
On Thursday, Apple announced quarterly sales that surpassed Wall Street’s predictions, thanks to robust demand for iPhones and a notable recovery in China. CEO Tim Cook shared with Reuters that the interest in their latest products was “tremendous.”
The iPhone 17 series played a significant role in boosting sales across major markets, calming investor worries about stagnating hardware sales. Consumers have responded positively to the improved camera features and performance enhancements. There’s also been a noticeable wave of upgrades from users of older models.
Following the earnings report, Apple shares jumped 2.8% during after-hours trading.
“The demand for the iPhone was simply incredible, with sales up 23% year-over-year, marking our biggest quarter ever,” said Tim Cook in an interview.
iPhone sales hit $85.27 billion in the fiscal first quarter ending in December, significantly exceeding the expected $78.65 billion from analysts. Apple highlighted record-breaking iPhone sales across all geographic segments, showcasing strong demand despite economic uncertainties.
Cook mentioned that the company currently has 2.5 billion devices in use, which suggests continued growth.
Quarterly revenue rose 16% from the previous year to $143.8 billion, surpassing the average estimate of $138.48 billion, according to LSEG. Earnings per share were reported at $2.84, well above the consensus of $2.67.
Apple’s gross profit margin reached 48.2%, surpassing its own projections and analysts’ expectations of 47.45%. Interestingly, this indicates that rising costs for components haven’t yet impacted Apple’s results.
When asked about memory prices, Cook refrained from commenting, noting that such discussions usually happen during quarterly earnings calls with analysts.
Earlier this month, Apple revealed a partnership with Google to enhance its AI capabilities, integrating the Gemini AI model into its ecosystem.
Sales in Greater China surged 38% year-over-year to $25.53 billion, far outpacing Visible Alpha’s estimated $21.32 billion. Although Apple faces competitive pressure and regulatory scrutiny in China, Cook noted record sales for the iPhone, with the iPhone 17 promoting a significant rise in users switching from Android.
While Apple doesn’t disclose specific sales figures for India, a key growth market, Cook indicated “double-digit” growth there and noted that iPhone, Mac, and other product sales are at record levels. Plans for opening a store in Mumbai are also in the works.
In contrast, Apple’s Wearables, Home and Accessories division reported revenue of $11.49 billion, falling short of expectations of $12.04 billion. Although the company launched the AirPods Pro 3—which offers translation capabilities—Cook admitted that demand for this product took Apple by surprise.
“There were supply constraints for AirPods Pro 3 this quarter, but I think we would have still seen year-over-year growth without those constraints,” Cook stated.
Sales for Macs were recorded at $8.39 billion, slightly below analysts’ expectations of $8.95 billion, while iPad sales increased to $8.6 billion, surpassing the forecast of $8.13 billion, aided by steady demand in education and ongoing interest in the pricier iPad Pro models.
Revenue from the services segment, which includes Apple Music, iCloud, and other software offerings, reached a record $30.01 billion, closely aligning with the expected $30.07 billion from analysts.
