Apple reported a 4% increase in overall revenue for its first fiscal quarter, although it fell short of analysts’ expectations for iPhone sales and experienced an 11.1% decline in sales from China, according to Thursday’s announcement from the company. Despite these setbacks, Apple shares climbed approximately 3% in after-hours trading as the company projected a revenue growth forecast for the upcoming March quarter.
In comparison to consensus estimates provided by LSEG for the quarter ending December 28, Apple exceeded earnings per share expectations, reporting $2.40 against an estimate of $2.35. Revenue came in at $124.30 billion, slightly above the estimated $124.12 billion. However, iPhone revenue was noted at $69.14 billion, missing the forecast of $71.03 billion. Other notable performances included Mac revenue of $8.99 billion and iPad revenue of $8.09 billion, both surpassing their estimates.
Apple anticipates growth of “low to mid single digits” on an annual basis in the March quarter, with expectations of “low double digits” growth for its Services division. CEO Tim Cook highlighted that the company has surpassed one billion subscriptions across its services, contributing to $26.34 billion in revenue from its Services sector, a 14% rise year-over-year.
The decline in iPhone sales during this quarter marks the most significant miss compared to estimates in two years. The slump was attributed mainly to the effects of production difficulties and a strong dollar impacting overall sales. Notably, Apple’s sales in Greater China experienced pronounced weaknesses, with the drop in sales reflecting a shift in channel inventory dynamics and the delayed rollout of the Apple Intelligence AI suite in the region.
Despite the challenges faced in iPhone sales and the critical Chinese market, the company’s Mac and iPad segments demonstrated robust growth, primarily due to the release of updated models and innovations, resulting in a strong customer response. Cook expressed optimism concerning the performance of their latest Mac lineup, contributing to the repeatable success of the company.
In summary, while Apple navigates a mixed fiscal landscape, the company remains committed to innovations and localized product launches, particularly in large markets like China. The proactive steps, including addressing inventory shifts and enhancing service offerings, bolster the potential for future growth and resilience against current market challenges.