Apple reports 13% jump in profits from iPhone and services businesses

Apple’s net income for the first quarter of fiscal 2024 rose 13% on an annualized basis, driven by strong iPhone sales and record revenue from its services business.

The California-based company’s net income soared to more than $33.9 billion for the year ended Dec. 30. On a quarterly basis, it rose 48%.

The company’s revenue for the quarter rose about 2% annually to nearly $119.6 billion, beating analysts’ estimates of $117.9 billion.

This was the first quarter that sales increased after four consecutive quarters of declines compared to the same period last year.

Apple’s fiscal year ends in September.

The company’s quarterly earnings were $2.18 per diluted share, an increase of 16% from the same period last year. That beat analysts’ expectations of $2.10.

Apple’s installed base of active devices now exceeds 2.2 billion, according to CEO Tim Cook.

The long-awaited augmented reality headset Vision Pro (priced at $3,499) will be available in the US market on Friday.

Apple began accepting orders on January 19 for the device, which was first announced at the company’s developer conference in June.

“Tomorrow, as customers begin to experience the amazing Apple Vision Pro, we remain committed to pursuing breakthrough innovations on behalf of our customers and in alignment with our values. ” said Cook.

Apple has not released official guidance regarding future sales and profits. The company stopped providing guidance at the start of the coronavirus pandemic, citing business uncertainty.

The company’s shares, which have risen about 24% over the past year, were trading 1.7% lower at $183.69 per share after market hours on Thursday.

Apple’s market value exceeded $3 trillion in June, establishing it as the world’s most valuable company at the time. As of Thursday’s market close, it was $2.89 trillion.

iPhone sales accounted for more than 58% of the company’s total revenue in the holiday quarter.

Smartphone sales for the quarter rose about 6% year over year to more than $69.7 billion, beating analysts’ expectations of $67.8 billion.

“Apple reported a strong quarter, highlighting the durability of its brand as the iPhone giant continues to expand its customer base,” said Jesse Cohen, senior analyst at Investing.com. . National.

“Solid demand growth for our high-end iPhone lineup helped offset gradual weakness in other areas of the business.

“Despite a strong quarter, investors expected more from Apple, which holds itself to higher standards than other tech companies.”

Total revenue from the company’s services segment increased approximately 11.3% annually to more than $23.1 billion, while revenue from wearables, home products, and accessories products decreased 11.3% annually to nearly $12 billion. .

Revenue from iPads and computers fell almost 13.5% to more than $14.8 billion.

Apple’s sales in the Americas region accounted for more than 42.2% of the company’s total revenue in the first quarter, or more than $50.4 billion.

This was followed by Europe and Greater China markets (China, Hong Kong, and Taiwan), where the company’s revenue increased by $30.4 billion and $20.8 billion, respectively.

Sales increased by 10% in Europe, but decreased by 13% in the Greater China market.

Japan and other Asia-Pacific markets added more than $17.9 billion to Apple’s first-quarter sales, a 10% annual increase.

“Apple’s worrying China sales figures show that demand for its high-end iPhones is slowing more than expected in the face of increasing competition from domestic companies including Huawei,” Cohen said. Stated.

“The big question is, is this just a blip or is it a sign of a bigger shift among consumers as rising interest rates and worsening economic conditions discourage them from making big-ticket purchases? I’m saying that.”

Apple’s cash and cash equivalents rose 36% annually to nearly $40.8 billion as of Dec. 31. The company also returned more than $27 billion to shareholders during the quarter.

“Our top-line performance and margin expansion in the December quarter drove us to an all-time record for EPS ($2.18),” Apple Chief Financial Officer Luca Maestri said in a statement.

“We are confident about the future and will continue to make significant investments across the business to support our long-term growth plans.”

Apple announced that its board of directors has declared a cash dividend of $0.24 per share of Apple’s common stock to be paid on February 15th.

Apple’s iPhone will overtake Samsung’s device to become the world’s best-selling smartphone in 2023, marking the first time a Korean company has dethroned the top spot since 2010.

According to the latest preliminary data from research firm International Data Corporation, Apple will ship 234.6 million iPhones in 2023, accounting for 20.1% of the global market, with an annual growth rate of 3.7%.

Updated: February 2, 2024, 12:36 AM