Apple (AAPL) Q4 2024 Earnings Report

Apple's fiscal fourth-quarter results beat Wall Street's expectations for revenue and earnings per share, but net income slumped after the company paid a one-time charge as part of a tax ruling in Europe.

Apple shares fell 1% in extended trading on Thursday.

Here's how the iPhone maker performed compared to LSEG consensus estimates for the quarter ended September 28:

• EPS: $1.64, adjusted, versus $1.60 estimated
• revenue: $94.93 billion versus estimated $94.58 billion
• iPhone sales: $46.22 billion versus an estimated $45.47 billion
• Mac sales: $7.74 billion versus an estimated $7.82 billion
• iPad sales: $6.95 billion versus an estimated $7.09 billion
• Sales of other products: $9.04 billion versus an estimated $9.21 billion
• Revenue from services: $24.97 billion versus an estimated $25.28 billion
• Gross margin: 46.2% versus 46.0% estimated

During the quarter Apple paid a one-time $10.2 billion income tax bill to resolve a long-running 2016 case over the company's handling of taxes in Ireland.

The company doesn't issue official forecasts, but executives typically speak to analysts about how they view the current quarter's performance.

Apple reported net income of $14.73 billion, or 97 cents per share, in the quarter, down from $22.96 billion, or $1.47 per share, in the year-ago period. Apple's adjusted earnings per share, after deducting the one-time tax charge, increased 12% year over year.

Revenue rose about 2% to $391.04 billion for the full fiscal year. September quarterly sales rose 6%. Its cash balance currently stands at $156.65 billion.

Total iPhone sales rose 6%, the first sign of how the iPhone 16 is performing in the market. Apple's newest devices launched on September 20, giving Apple about a week of new product sales during the quarter. It is still Apple's most important product, accounting for nearly 49% of the company's total revenue.

iPhone 15 sales were “stronger than 14 in the year-ago quarter, and 16 was stronger than 15,” Apple CEO Tim Cook told CNBC's Steve Kovach.

Cook said the company is looking forward to Apple Intelligence, the AI ​​system for iPhones and Macs that began rolling out this week as part of the iOS 18.1 update.

“We're already receiving great feedback from customers and developers, and a very early statistic based on just three days of data: users are adopting iOS 18.1 at twice the rate of 17.1 in the same quarter last year,” Cook said.

Apple's iPad business posted the strongest growth of any of Apple's hardware product lines, with revenue increasing 8% to $6.95 billion. Part of the sales resulted from pent-up demand. Apple launched new iPad Pro and Air models in May after the company didn't launch any new iPads throughout 2023.

Apple's Mac business rose 2% on an annual basis, reporting revenue of $7.74 billion in the quarter, including sales of back-to-school laptops. Cook told CNBC that growth was driven by sales of the company's MacBook Air, which was upgraded with new chips in the spring.

Apple's services business – which includes online subscriptions like iCloud, Google Search revenue and AppleCare guarantees for Apple hardware – remains a huge success, growing 12% annually to nearly $25 billion in revenue. However, Apple's services revenue fell short of LSEG's consensus expectations.

The company reports its sales of AirPods headphones, Homepod speakers and Apple Watch in a category it calls “other products” or “wearables.” Sales for this unit were weak compared to forecasts at $9.04 billion, down 3% from a year ago. In addition to the new iPhones, the company also launched new Apple Watch and AirPods models during the quarter.

Apple's results in China are being closely watched by investors as it is the company's third-largest region after the Americas and Europe. Apple also faces renewed competition from local Chinese mobile phone makers such as Huawei. Apple's revenue in China, Taiwan and Hong Kong fell slightly year-on-year to $15.03 billion.

Apple said it spent $29 billion on stock buybacks and dividends during the quarter.

Apple caps off a busy week of earnings for top tech companies. Alphabet reported better-than-expected results on Tuesday, driven by cloud growth. Microsoft issued disappointing forecasts on Wednesday, leading to the stock's biggest selloff in two years, while Meta beat estimates but warned of a significant acceleration in its infrastructure spending next year. Amazon reported strong growth in its AWS cloud business on Thursday.

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