Apple Posts Earnings Exceeding Wall Street Expectations... Weakness Outside iPhone and Decline in China Sales

One-time Tax Payment of $10.2 Billion Reduces Net Profit
"iPhone 16 More Popular Than Previous Model... iOS 18.1 Adoption Twice as Fast"
Stock Price Up 17% This Year... After-hours Trading Down Over 1%

Apple reported earnings for the fourth quarter of fiscal year 2024 that exceeded market expectations, but its stock price fell due to weak sales of products other than the iPhone and sluggish revenue in the Greater China region.

On the 31st (local time), Apple announced fourth-quarter revenue of $94.93 billion and adjusted earnings per share of $1.64.

[Image source=Yonhap News]

Both revenue and earnings per share slightly surpassed Wall Street estimates compiled by market research firm LSEG, which were $94.58 billion and $1.60, respectively.

Compared to the same period last year, revenue increased by 6%, but net income dropped significantly from $22.96 billion to $14.73 billion. Apple explained that this was due to a one-time tax payment of $10.2 billion to Ireland following a September ruling by the European Court of Justice.

iPhone sales, which account for half of Apple’s revenue and are central to its performance, reached $46.22 billion, exceeding market expectations of $45.47 billion. However, Mac and iPad sales fell short of estimates, recording $7.74 billion and $6.95 billion respectively. Service revenue also grew but missed expectations, coming in at $24.97 billion compared to the anticipated $25.28 billion.

By region, revenue from the Greater China area slightly declined year-over-year to $15 billion, falling short of the market estimate of $15.8 billion. Bloomberg reported, "Apple faces fierce competition from local companies in China, which serves as a major manufacturing hub."

Total revenue for fiscal year 2024 was $391.04 billion, representing only about a 2% increase from the previous year.

Apple CEO Tim Cook stated in a CNBC interview that day, "iPhone 15 sales were stronger than iPhone 14 in the same period last year, and iPhone 16 sales are stronger than iPhone 15."

He also expressed optimism about the AI system "Apple Intelligence," introduced through the recently released iOS 18.1. Cook said, "We have already received positive feedback from customers and developers," adding, "We have three days of initial statistics, and users are adopting iOS 18.1 at twice the speed of iOS 17.1, which was released in the same period last year."

Bloomberg commented, "Since Apple Intelligence has only provided part of the platform’s functionality so far, it is difficult to say how much it will drive demand in the long term," and added, "Apple is struggling to find new categories that can stimulate growth."

Apple’s stock closed down 1.82% that day. In after-hours trading, it fell about 1.53% around 7 p.m. Eastern Time. This year, Apple’s stock has risen 17% fueled by expectations around AI.

This content was produced with the assistance of AI translation services.