Apple sees record revenues on strong iPhone sales
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Apple (AAPL-1.81%) reported record quarterly revenues buoyed by strong iPhone sales in its fiscal fourth quarter.
The Cupertino, California-based tech giant saw $94.9 billion in revenue for the fourth quarter, up 6% from $89.5 billion in the same quarter a year ago, the company reported Thursday. That surpassed Wall Street’s projected $94.46 billion in revenue, according to estimates compiled by FactSet (FDS+0.07%).
Of those sales, $46.22 billion came from the iPhone. That’s up 6% from $43.81 billion a year prior, and a sign that excitement for the iPhone 16 may be better than earlier reports had indicated. Net sales were up to $94.3 billion, thanks to stronger performance from the iPhone, Mac, iPad, and Services.
Net income for the quarter came in at $14.74 billion, or $0.97 per share, down from from $22.96 billion last year. That fell far short of analysts’ expected $24.24 billion in net income, or earnings per share of $1.60. Profits took a hit from a one-time charge of $10.2 billion related to an Irish tax case it settled with European regulators last month.
Shares of Apple were down 1.33% in after hours trading Thursday.
Apple officially rolled out its new artificial intelligence features, known as Apple Intelligence, for users with the iPhone 15 Pro or iPhone 16 early this week. The company first unveiled its latest slate of iPhones and Apple Intelligence at its annual event in early September.
In a call with analysts Thursday, Apple chief Tim Cook said Apple Intelligence “marks the beginning of a new chapter” for the company’s innovation. New features are expected to roll out in December, including ChatGPT integration, Cook said.
“AI could not be a more relevant topic for Apple this quarter as they just publicly released Apple Intelligence to the world on Monday,” said Christophe Ponsart, partner in the applied AI practice at consulting firm Qvest.US. “Timing is everything and a release prior to quarter end helps to gain investor confidence on Apple’s ability to deliver with AI.”
Since its release, however, analysts have been split on whether the new features will help drive upgrades and growth at the tech giant. While some are expecting the new AI tools to help boost iPhone sales and entice users to upgrade, analysts at Jefferies (JEF-0.79%) said in a note this week that the features — which will include limited hardware capabilities and a still relatively small AI model — “are not significant enough” to power sales.
Some users have also complained about long waits to download the new iOS that supports Apple Intelligence, and found the early features buggy.
Read more: Apple Intelligence is here. Early users are underwhelmed
But Bank of America (BAC-1.11%) researchers said in an Oct. 25 note that this cycle is “more dynamic with more material software updates that increases the value to the user.”
“As visual intelligence, ChatGPT integration and broader Apple Intelligence features become more mainstream and improved over time, the value of personalization will likely become increasingly relevant,” they wrote.
Ahead of earnings, Apple also unveiled a series of new computer models, including an upgraded iMac, Mac mini, and MacBook Pro featuring the M4 family of chips and Apple Intelligence.
