Apple Reports Mixed Q1 Results, Forecasts Revenue Growth

Cupertino, California, Feb. 2 -- Apple Inc. (AAPL) released its fiscal first quarter earnings today, providing a cautiously optimistic revenue forecast for the current quarter. Despite mixed results for the holiday period, shares climbed over 3% in premarket trading.

Revenue and Earnings

Total revenue grew by 4% to $124.3 billion, slightly exceeding analysts' expectations of $124.1 billion. Profit increased to $2.40 per share, beating estimates of $2.35 and setting a new record high.

iPhone and China

iPhone sales declined less than 1% to $69.1 billion, while analysts projected $71 billion. Apple Intelligence, the company's new AI platform, did not significantly boost overall iPhone sales, but the iPhone 16 performed better in countries where these features were available.

Revenue from China plunged by 11% to $18.5 billion, significantly below analysts' expectations of $21.6 billion. CEO Tim Cook attributed more than half of this decline to inventory issues.

Services and Wearables

The services business continues to be a bright spot, with revenue reaching an all-time high of $26.3 billion, exceeding estimates of $26.1 billion. Wearables, home, and accessories, however, saw a slight revenue decline to $11.8 billion, below projections of $12 billion.

Mac and iPad

Mac sales surpassed expectations, generating $8.99 billion compared to estimates of $7.94 billion. The iPad lineup also performed well, with revenue growing by 15% to $8.09 billion.

Challenges and Outlook

Apple faces ongoing challenges in China, where it lacks Apple Intelligence capabilities and faces competition from local brands. In the EU, the company faces scrutiny over App Store dominance. Additionally, the possibility of new tariffs under the Trump administration remains a concern.

Despite these challenges, Apple is investing heavily in AI, planning a larger iPhone refresh this year, and expects services and iPad revenue to continue growing. The company's integration of silicon and software is seen as a competitive advantage.