Apple‘s latest fiscal fourth-quarter earnings, announced on Thursday, surpassed analyst forecasts for sales and earnings per share, despite an overall downward trend in sales for the fourth consecutive quarter. Notably, all hardware segments, excluding the iPhone, experienced a decline in revenue year over year, with substantial drops observed in the iPad and Mac divisions.
Consequently, the tech giant’s shares plummeted over 3% in extended trading as company executives expressed doubts about a possible return to growth in the upcoming holiday quarter.
A comprehensive breakdown of Apple’s performance compared to LSEG’s consensus expectations reveals the following results:
- Earnings per share (EPS): $1.46 per share, exceeding the expected $1.39 per share.
- Revenue: $89.5 billion, slightly surpassing the anticipated $89.28 billion.
- iPhone revenue: $43.81 billion, in line with the projected $43.81 billion.
- Mac revenue: $7.61 billion, falling short of the estimated $8.63 billion.
- iPad revenue: $6.44 billion, surpassing the estimated $6.07 billion.
- Wearables revenue: $9.32 billion, slightly lower than the anticipated $9.43 billion.
- Services revenue: $22.31 billion, outperforming the expected $21.35 billion.
- Gross margin: 45.2%, higher than the expected 44.5%.
Although Apple refrained from providing formal guidance, Luca Maestri, the finance chief, indicated that the company foresees December quarter revenue to be comparable to that of the previous year. Notably, this year’s December quarter will comprise one fewer week.
Analysts had projected revenue of $122.98 billion for the December quarter, which would signify a 5% year-over-year growth during Apple’s crucial period.
In terms of net income, Apple recorded $22.96 billion, equating to $1.46 per share, compared to $20.72 billion, or $1.29 per share, during the corresponding period last year. The company’s overall sales for the full fiscal year amounted to $383.29 billion, reflecting a 3% decline from the previous year. Notably, quarterly revenue experienced a less than 1% decline in the September quarter.
While iPhone sales aligned with Wall Street expectations, showcasing a 2% increase compared to the previous year, other hardware segments, including Mac and iPad, witnessed a decline. Notably, the Mac sales fell by nearly 34% year over year, failing to meet Wall Street‘s projections.
On the positive side, the services division remained a bright spot, as the company witnessed a significant increase of 16% in services revenue, surpassing analyst expectations. This division includes iCloud storage, Apple Music, and AppleCare, among other services. Additionally, Apple’s wearables business, encompassing AirPods and Apple Watch, experienced a modest decline of over 3%.
The company’s operations in Greater China, its third largest market, faced scrutiny as investors expressed concerns about mounting competition from Huawei. Sales in the Greater China region remained relatively stagnant, reporting $15.08 billion in revenue, inclusive of Hong Kong and Taiwan.
Despite the challenges, Apple continues to maintain a substantial cash reserve, reporting $162.1 billion in cash and cash-like securities. The company also announced plans to issue a dividend of 24 cents per share this month, in addition to having spent $25 billion during the quarter on share repurchases and dividends.
