Apple posted stronger-than-expected fourth quarter earnings Thursday, as well as a September record for iPhone sales, as it lays the groundwork for its newly-minted ambitions in artificial intelligence technologies
Apple (AAPL) , the world's most-valuable company, is looking to deliver its version of AI, dubbed Apple Intelligence, to its 2.2 billion global user base largely through its recently-launched iPhone 16.
Early indications from a host of market research groups, Wall Street analysts, and Apple-focused websites, however, suggest demand for the new smartphone is tracking close to or just below iPhone 15 levels as consumers seem content to wait for more details on the Apple Intelligence rollout and software updates tied to the group's broader AI strategy.
Apple said earnings for the three months ending in September, the group's fiscal fourth quarter, were pegged at $1.64 per share, a tally that was up 12.3% from the same period last year and 4 cents ahead of the Street consensus forecast.
Removing a one-time charge to reflect a recent European ruling on taxes, however, trims the fourth quarter total to 97 cents per share.
Group revenues, Apple said, 6% from last year to $94.93 billion, a tally that narrowly topped analysts' estimates of $94.56 billion.
Cook kicks off the earnings call and reiterates that Apple Intelligence features will be "rolling out in the coming months".
— Gene Munster (@munster_gene) October 31, 2024
This is a subtle reminder that patience will be a virtue for Apple investors. $AAPL
Finance chief Luca Maestri said current quarter sales, a key metric for investors, would likely rise by the low to mid-single digits, in percentage terms, from last year's $119.58 billion total, a forecast that was largely shy of Wall Street forecasts.
Apple said iPhone revenues rose 5.5% from last year to a September quarter record of $46.22 billion, topping Street forecasts, while China sales were largely flat to last year at $15.03 billion as world's second largest economy's post-Covid recovery continues to sputter.
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“During the quarter, we were excited to announce our best products yet, with the all-new iPhone 16 lineup, Apple Watch Series 10, AirPods 4, and remarkable features for hearing health and sleep apnea detection," said CEO Tim Cook. "And this week, we released our first set of features for Apple Intelligence, which sets a new standard for privacy in AI and supercharges our lineup heading into the holiday season.”
Related: Analysts revisit Apple stock forecast ahead of earnings
Apple shares were marked 2% lower in after-hours trading immediately following the earnings release to indicate a Friday opening bell price of $221.62 each, a move that would trim the stock's year-to-date gain to around 16%.
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Revenues from Apple's key services business - which includes Apple Pay, iCloud and Apple TV - rose 12% to $24.97 billion, just shy of the Street's $25.3 billion forecast.
Hardware sales, were mixed: Mac sales rose 1.7% from last year to $7.74 billion, Apple said, and iPad sales were up 8% to $6.95 billion. Wearables sales, which includes the AppleWatch, fell 3% to $9.04 billion.
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