Apple Reports Q1 Earnings Beat, iPhone Sales Lag
Apple (AAPL) released its fiscal first quarter earnings after market close on Thursday, surpassing expectations on revenue and earnings per share (EPS) but falling short on iPhone sales. Revenue from China, a key market for Apple, was also lower than analysts anticipated.
Key Financials:
- EPS: $2.40 vs. consensus estimate of $2.35
- Revenue: $124.3 billion vs. consensus estimate of $124.1 billion
Business Segments:
- iPhone: $69.1 billion vs. expectations of $71 billion
- Services: $26.3 billion in line with expectations
- Greater China sales: $18.5 billion vs. expectations of $21.5 billion
China Challenges:
China has been a concern for Apple in recent quarters, with sales declining 8% in 2024 and 2% in 2023. Apple attributed the weakness to a weaker renminbi and reduced iPhone and iPad sales.
iPhone Market Share:
Despite the overall smartphone market growing, Apple's iPhone market share declined 1% year over year in Q4 to 23%, according to IDC and Canalys.
AI Push and Product Releases:
Apple continues its push into artificial intelligence (AI) with its Apple Intelligence updates. The software aims to attract consumers to upgrade to the latest iPhone 16 series. However, analysts are skeptical about its potential impact.
Apple plans to launch several new products in the coming months, including an entry-level iPhone SE, iPads, and MacBook Airs.
Stock Performance:
Apple's stock is up 24% over the past year, on par with Google (GOOG) but below Nvidia (NVDA) and Meta (META). Microsoft (MSFT) has lagged the market with a gain of just 8% over the same period.