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Apple said on a conference call with investors as uncertainty about how the rollout of new AI capabilities will be reflected in sales of iPhones and other devices complicates otherwise strong quarterly results. , provided cautious guidance for the critical holiday quarter.
The company’s sales growth outlook for the current quarter is in the low to mid-single digits, slightly below the high end of Wall Street expectations. Shares fell 1.9% in after-hours trading Thursday.
Consensus estimates before the call predicted revenue of about $128 billion for the current quarter, at the high end of the limited guidance Apple provided on Thursday, and an increase of about 7% from a year earlier. It is said to be equivalent to The company did not provide exact guidance numbers.
The report from the world’s most valuable publicly traded company comes in a week of mixed earnings for Big Tech companies, with Google and Amazon beating expectations, but Microsoft and Meta missing expectations, and U.S. stocks on Thursday. It dragged the whole thing down.
Apple reported solid revenue growth in its hardware and services business, but sales in the China region were flat from a year ago.
Analysts were also eyeing the first glimpse of iPhone 16 sales with Apple Intelligence features.
Revenue for the quarter that ended Sept. 28 rose 6% from a year earlier to $94.9 billion, slightly beating consensus estimates of $94.4 billion.
Diluted earnings per share were $0.97 after the company received a one-time charge of $10.2 billion related to an EU tax ruling earlier this year. Net income was $14.7 billion, compared to analysts’ expectations of $24.3 billion excluding expenses.
Overall iPhone sales were $46.2 billion, compared to $43.8 billion in the same period last year. Sales in China were flat year over year at about $15 billion, an improvement from declines in the previous two quarters of 2024.
In a call with investors, Apple CEO Tim Cook credited the company’s improved performance in China, with strong smartphone sales and a growing user base, as well as improved exchange rates. Ta.
The company’s services business, which includes the App Store and Apple Pay, rose about 12% year over year to $24.9 billion.
On Monday, Apple began rolling out AI capabilities in software updates for iPhones, iPads, and Macs. The first Apple Intelligence tools, initially available only in U.S. English and limited to smartphones up to iPhone 15 and 16, include an improved Siri voice assistant, writing assistants, and AI-powered photo editing tools. It was.
Apple’s chief financial officer, Luca Maestri, told the Financial Times that sales of the iPhone 16, the latest model of the company’s flagship smartphone that shipped on September 20, will continue to grow in the first eight days of sales in 2023. “It exceeded sales of iPhone 15,” he said.
Maestri said customers are embracing new generative AI capabilities and downloaded the AI-focused operating system this week at twice the rate of last year’s software updates.
More AI features will be released by the end of the year, including Siri and ChatGPT integration, AI-powered emoji and image generation, and more.
Analysts doubt whether the AI-driven revenue boost will be enough to deliver this quarter. Both Mr. Cook and Mr. Maestri declined to elaborate on the expected impact of Apple Intelligence on the holiday season immediately after its release.
Maestri will retire as chief financial officer in early 2025, and Kevan Parekh, Apple’s vice president of financial planning and analysis, will take over the role.
Cook also declined to comment on the upcoming U.S. presidential election. Apple’s supply chain is deeply tied to Chinese manufacturers, and former President Donald Trump has vowed to impose new tariffs on imported goods if he wins a second term.
“I don’t want to speculate about things like that,” Cook said.
