Record Revenue and Earnings Beat Expectations
Apple Inc. (AAPL) posted strong fiscal first-quarter earnings, surpassing analysts’ expectations, driven by robust growth in its services segment. The company reported a revenue increase of 4% year-over-year, reaching a record $124.3 billion, aligning closely with analysts’ predictions from Visible Alpha. Net income rose to $36.33 billion, setting an all-time high of $2.40 per share, up from $33.92 billion or $2.28 per share a year ago, exceeding market forecasts.
Apple’s services sector was a key contributor to the earnings beat, growing 14% to $26.34 billion. Additionally, Mac and iPad sales demonstrated impressive double-digit growth, with Mac revenue climbing over 15% to $8.99 billion and iPad sales increasing to $8.09 billion. However, Apple iPhone sales primary revenue driver, fell just under 1% to $69.14 billion, falling short of projections. This quarter marked the first full quarter since the release of the iPhone 16 in September, which has yet to fully meet sales expectations.
China Sales Decline Amid Rising Competition
Apple’s performance varied across global markets, with sales dipping in the Greater China region due to increasing competition from domestic smartphone brands such as Vivo and Huawei. The decline in China stood in contrast to gains in other regions, making it the only area where Apple experienced a year-over-year drop in revenue for the quarter.
During Apple iPhone sales earnings call, CEO Tim Cook highlighted that iPhone 16 sales have performed well in regions where Apple Intelligence services are accessible. However, China has yet to receive Apple Intelligence due to ongoing regulatory challenges, potentially impacting demand. Despite this setback, Cook emphasized that overall, the iPhone 16 lineup outperformed its predecessor’s post-launch sales, the iPhone 15.
Cook also noted a record number of device upgrades in the quarter, signaling strong customer retention and brand loyalty. The number of active Apple devices worldwide reached an unprecedented 2.35 billion, reflecting the company’s expanding ecosystem and sustained consumer interest.
Future Outlook and Stock Performance
Looking ahead, Apple provided guidance for the fiscal second quarter, forecasting revenue growth in the mid-to-low single-digit percentage range, aligning with market expectations. The company anticipates gross margins to fall between 46.5% and 47.5%, surpassing analyst estimates.
Following the earnings announcement, Apple’s stock saw a positive reaction, climbing about 3% in extended trading on Thursday. Over the past 12 months, the company’s shares have gained more than 27%, reflecting continued investor confidence despite concerns over iPhone sales and challenges in the Chinese market.
As Apple iPhone sales navigates evolving global market dynamics, its robust services growth and record-high device activations suggest a strong foundation for future earnings. However, with iPhone sales facing headwinds, the company may need to further innovate and adapt to sustain its growth trajectory.
