Apple narrowly beats estimates with boost from iPhone sales

Apple reported revenues Thursday that narrowly surpassed analyst expectations, sending shares lower in after-hours trading even as the company enjoyed a boost from iPhone sales.

The tech giant saw quarterly revenue of $94.9 billion in the three months ending September 28, up from the same period last year, in a closely watched report as investors seek to gauge demand for its latest iPhones.

Revenue in greater China, however, showed weakness -- falling slightly from the same period a year earlier to $15 billion.

The Americas remained Apple's largest market with $41.7 billion in revenue, while Europe showed strong growth at $24.9 billion.

Overall, Apple barely exceeded analysts' projections, while the four other technology giants that published this week easily passed the bar set by the market.

This sent shares of Apple, the world's most valuable traded company, down two percent in extended trading after the results were posted.

The quarter's results were significantly affected by the EU Court of Justice's ruling over the company's tax affairs in Europe.

That resulted in a back-tax charge of $10.2 billion, representing $15.8 billion payable to Ireland, partially offset by a US tax credit.

Apple's iPhone sales came in at $46.2 billion, compared with expectations of $45.2 billion for the company's key product.

"Today Apple is reporting a new September quarter revenue record," said CEO Tim Cook in a statement, adding that the quarter included the company's launch of a new iPhone 16 lineup.

Investors are eyeing demand for new iPhones with artificial intelligence features, especially as the holiday season approaches.

Apple executives said that early sales of iPhone 16 trended higher than its predecessor since it hit the market, though without offering detailed figures.

The company has since rolled out its first set of AI features dubbed "Apple Intelligence," across its premium iPhone, iPad and Mac devices, a major push into generative AI.

Along with Apple, other tech giants like Google, Microsoft and Amazon are convinced that generative AI's powers are the next chapter of computing and are boosting spending so as not to be left behind.

But Apple indicated that it would privilege quality and safety over speed as it rolls out the new AI features.

"We're very early in the cycle, with a lot of new products and features that we are launching," said Apple CFO Luca Maestri.

"The Apple Intelligence rollout is going to happen over time (and) not across the world as normally we do with software releases," he added.

In the quarter, Apple's services segment -- which includes Apple Music, iCloud, the App Store, and Apple TV+ -- achieved a new all-time high with revenue of $25 billion, representing a 12 percent increase from the previous year.

The company's shares were up more than 20 percent year-to-date, largely on confidence that AI capabilities will attract consumers to the iPhone 16.

© 2024 AFP