Apple reported earnings after the bell. Here are the results.
www.cnbc.com
- Apple reported fiscal first-quarter earnings on Thursday that beat estimates for revenue and earnings.
- But it showed a 13% decline in sales in China, one of its most important markets.
Here’s how Apple did versus consensus expectations from LSEG, formerly known as Refinitiv, for the quarter ending Dec. 30:
- Earnings per share: $2.18 vs. $2.10 expected
- Revenue: $119.58 billion vs. $117.91 billion expected
Here’s how Apple’s product lines did versus LSEG expectations:
- iPhone revenue: $69.70 billion vs. $67.82 billion expected
- Mac revenue: $7.78 billion vs. $7.73 billion expected
- iPad revenue: $7.02 billion vs. $7.33 billion expected
- Other Products revenue: $11.95 billion vs. $11.56 billion expected
- Services revenue: $23.12 billion vs. $23.35 billion expected
- Gross margin: 45.9% vs. 45.3% expected
Apple did not provide guidance for the current quarter ending in March.
Apple CFO Luca Maestri said that Apple expected iPhone sales in the March quarter would be similar to last year’s $51.33 billion in revenue, after taking out $5 billion in sales attributed to outperformance a year ago as supply recovered from Covid shutdowns and caught up to demand.
Maestri said total company revenue would be similar to last year’s $94.84 billion after taking out the $5 billion in iPhone sales. He added that services would grow the same as in the December quarter, which was 11%.
Apple reported 2% sales growth in the December quarter, breaking a streak of four straight quarters with annual revenue declines. Apple’s gross margin continues to rise, nearly breaking 46% in the December quarter. Apple reported $33.92 billion in net income during the quarter, up 13% from the same period last year.
IPhone sales were just under revised Street expectations and grew nearly 6% to $69.70 billion, a positive sign for the iPhone 15 models released in September. This is Apple’s first full quarter with iPhone 15 revenue.
Apple’s profitable services business rose 11% during the quarter to $23.11 billion in revenue, but it still came in slightly short of estimates. Investors closely watch the growth of Apple’s services business, which includes subscriptions such as Apple Music, warranties, search licensing revenue, and payments from Apple Pay and Apple’s advertisements.
Apple said it had 2.2 billion active devices in use, a metric that many analysts say informs how they forecast Apple’s services growth. That’s up from 2 billion active devices at the same time last year.
Cook attributed services growth to products including advertising, cloud services, payments, and the company’s App Store. He said that Apple has more than 1 billion paid subscriptions, which includes subscriptions to apps through the App Store.
Mac sales grew less than 1% during the quarter to $7.7 billion, in line with estimates. It’s a significant recovery for the product line, which fell nearly 34% on an annual basis in the September quarter.
IPad sales continue to slump, falling 25% during the quarter to $7.02 billion, slightly short of Street estimates. Apple didn’t release a new iPad model in 2023 for the first time in the product’s history.
Cook said that iPad performance “wasn’t a surprise to us.”
“The iPad faced a very difficult comp, if you recall, in the year-ago quarter where we launched iPad Pro and iPad 10th generation,” Cook said.
The company’s wearables business, sometimes called “Other Products,” includes AirPods headphones and the Apple Watch. It also had a rough quarter, declining 11% on a year-over-year basis to $11.95 billion in sales, although it topped Street estimates. The newest Apple Watches were removed from Apple stores in December for a few days over a patent dispute with medical device company Masimo.
