Apple Reports Strong Earnings, Falls Short on iPhone Revenue
Apple (AAPL) surpassed expectations in its fiscal first quarter earnings, posting strong top and bottom line results. However, the tech giant missed estimates for iPhone revenue and reported weaker-than-anticipated sales in Greater China.
Despite the mixed results, Apple's stock surged over 3% in pre-market trading on Friday. The positive market sentiment follows last week's downgrades from Jefferies, Loop Capital, and Oppenheimer, all citing concerns over sluggish iPhone demand.
For the quarter, Apple delivered earnings per share (EPS) of $2.40 on revenue of $124.3 billion, exceeding analysts' expectations of $2.35 EPS and $124.1 billion revenue.
While Apple's iPhone segment generated $69.1 billion, slightly below the $71 billion estimate, it remained a key contributor to revenue. The Services business performed in line with expectations, bringing in $26.3 billion.
However, sales in Greater China fell short of Wall Street's forecast, clocking in at $18.5 billion versus the anticipated $21.5 billion. This region has been a challenge for Apple in recent years, with sales declining 8% in 2024 and 2% in 2023.
Apple's ongoing AI push, including the release of its Apple Intelligence updates, is intended to drive consumer upgrades to the latest iPhone 16 line. However, analysts remain cautious about its potential as a game-changer.
Despite the concerns, Apple is expected to launch a slew of new products in the coming months, including an updated iPhone SE, iPads, and MacBook Airs.
In the broader tech landscape, Apple has performed in line with Google (GOOG, GOOGL), which has gained 27% over the past year. Nvidia (NVDA) has outpaced the industry with a 102% increase, while Meta (META) has grown by 69%. Microsoft (MSFT) remains a laggard, rising only 8% over the same period.