Apple Inc’s artificial intelligence (AI)-enhanced iPhone made a strong start, pushing quarterly sales ahead of Wall Street expectations, but a modest revenue forecast raised questions about whether that momentum will hold over the holiday sales season.
A decline in China sales during the fourth quarter (4Q) also concerned some analysts and investors, helping send shares down 1.4% in after-hours trade, despite surprisingly large overall profit and revenue in that period.
Chief Financial Officer Luca Maestri told analysts during a conference call that Apple expects overall revenue to “grow low—to mid-single digits” during its fiscal 1Q, which ends in December. According to LSEG data, analysts had expected revenue growth of 6.65% to US$127.53 billion during the quarter.
Apple said overall 4Q sales were US$94.93 billion, ahead of Wall Street targets of US$94.58 billion, according to LSEG. Earnings of US$1.64 per share, excluding a massive one-time tax charge in the European Union, topped analyst expectations of US$1.60 per share.
Apple’s main product, the iPhone, saw sales in 4Q increased 5.5% to US$46.22 billion, compared to analyst estimates of US$45.47 billion. Other product lines missed expectations.
Sales in Apple’s services business, which includes iCloud storage and Apple Music, were US$24.97 billion compared to analyst expectations of US$25.28 billion, according to LSEG. Mac and iPad sales were US$7.74 billion and US$6.95 billion, respectively, compared to estimates of US$7.82 billion and US$7.09 billion, according to LSEG data.
Sales in Apple’s home and wearables business, which includes its Apple Watch and AirPods devices, fell to US$9.04 billion compared to estimates of US$9.2 billion, according to LSEG.
Earnings per share were 97 cents including the charge related to a one-time multi-billion-euro European tax payment.
