Apple Posts Earnings That Just Exceed Expectations Driven by iPhone Sales

Apple released its quarterly revenue report on Thursday, revealing figures that barely outpaced analyst predictions. Despite the modest beat, the company's shares fell by two percent in after-hours trading. A significant driver of Apple’s revenue was its iPhone sales.

For the three months ending on September 28, Apple reported a total revenue of $94.9 billion, marking an increase compared to the same timeframe last year. Investors closely monitor such reports to evaluate how well the new iPhone models are being received by consumers.

However, results from greater China indicated a slight decline in revenue, which was reported at $15 billion, down from the previous year's figures. In contrast, the Americas continued to be the largest market for Apple, generating $41.7 billion in revenue, while Europe showed a robust growth rate, bringing in $24.9 billion.

For the quarter, Apple’s revenue just edged past the forecasts made by analysts, unlike several other major tech companies that reported stronger-than-expected results this week. This underachievement in comparison led to a drop in Apple’s stock value, despite it being the most valuable traded company globally.

The company’s finances were notably impacted by a recent ruling from the EU Court of Justice regarding its tax obligations in Europe. This ruling has resulted in a sizable back-tax charge of $10.2 billion, primarily owed to Ireland, though it was partially offset by a tax credit from the U.S.

On the iPhone front, Apple recorded sales of $46.2 billion, surpassing the anticipated $45.2 billion for this key product line. Apple CEO Tim Cook touted a record revenue for the September quarter, mentioning that this period coincided with the launch of the new iPhone 16 lineup.

Investors are particularly keen on the demand for the new iPhones, especially those integrated with artificial intelligence features, as the crucial holiday shopping season approaches. Apple executives noted that early sales of the iPhone 16 have been better than those of its predecessor since its launch, although specific sales numbers were not disclosed.

The company is also making notable strides in AI, introducing its new set of features called “Apple Intelligence” across its premium products, including iPhones, iPads, and Macs. This move represents a significant shift towards generative AI, an area in which other tech giants like Google, Microsoft, and Amazon are heavily investing to remain competitive.

Despite the rapid advancements, Apple has emphasized that it prioritizes quality and safety over the speed of rolling out these new AI features. As Apple CFO Luca Maestri stated, the rollout of Apple Intelligence will be gradual rather than a typical widespread launch.

In addition to hardware sales, Apple’s services sector—encompassing Apple Music, iCloud, the App Store, and Apple TV+—saw impressive growth, reaching a record revenue of $25 billion, which reflects a 12 percent increase compared to the previous year. Overall, Apple's stock has gained over 20 percent this year, reflecting investor confidence that its AI capabilities could boost interest in the iPhone 16.

Apple, Revenue, iPhone