KEY POINTS
- Apple’s fiscal fourth-quarter results beat Wall Street expectations for revenue and earnings per share but net income slumped after the company paid a one-time charge as part of a tax decision in Europe.
- iPhone sales and overall sales both rose by 6%.
- Sales of the iPhone 15 were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15,” Apple CEO Tim Cook told CNBC’s Steve Kovach.
Sales of the iPhone 15 were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15,” Apple CEO Tim Cook told CNBC’s Steve Kovach.
Cook said that the company was looking forward to Apple Intelligence, the AI system for iPhones and Macs that started to roll out this week as part of the iOS 18.1 update.
“We’re getting great feedback from customers and developers already and a really early stat, which is only three days worth of data: Users are adopting iOS 18.1 at twice the rate that they adopted 17.1 in the year ago quarter,” Cook said.
Apple’s iPad business had the strongest growth of any of Apple’s hardware lines with an 8% increase in sales to $6.95 billion. Part of the sales were from pent-up demand. Apple released new iPad Pro and Air models in May after going through all of 2023 without releasing new iPads.
Apple’s Mac business rose 2% on an annual basis to report $7.74 billion in revenue during the quarter, which includes back-to-school laptop sales. Cook told CNBC that the growth was driven by sales of the company’s MacBook Air, which was updated with new chips in the spring.
Apple’s services business -- which includes online subscriptions such as iCloud, Google search revenue, and AppleCare warranties for Apple hardware -- remains a juggernaut and grew 12% on an annual basis to nearly $25 billion in sales. However, Apple’s services revenue came in under LSEG consensus expectations.
The company reports its AirPods headphones, Homepod speakers and Apple Watch sales in a category it calls Other Products or wearables. That unit’s revenue came in light versus forecasts at $9.04 billion, which was down 3% year over year. The company released new Apple Watch and AirPods models during the quarter alongside the new iPhones.
Apple’s results in China are closely watched by investors as it is the company’s third-largest region after the Americas and Europe. Apple also faces renewed competition from local Chinese handset makers like Huawei. Apple’s revenue in China, Taiwan, and Hong Kong was down slightly year over year at $15.03 billion.
Apple said that it had spent $29 billion on share repurchases and dividends during the quarter.