Apple Shares Surge 3% as Services Revenue Growth Outshines
Apple Inc. reported a 4% increase in revenue for its first fiscal quarter, but iPhone sales fell short of Wall Street estimates, and China sales dropped by 11.1%. Despite this, Apple’s stock jumped 3% in extended trading, fueled by strong performance in its services division and a positive growth forecast for the upcoming quarter.
Key Financial Highlights:
📌 Earnings Per Share: $2.40 (vs. $2.35 estimated)
📌 Revenue: $124.30 billion (vs. $124.12 billion estimated)
📌 iPhone Revenue: $69.14 billion (vs. $71.03 billion estimated)
📌 Services Revenue: $26.34 billion (vs. $26.09 billion estimated)
Services Lead the Way
Apple’s Services segment, including Apple TV+, iCloud, and the App Store, generated $26.34 billion in revenue—a 14% increase from the previous year. CEO Tim Cook revealed that Apple now has over one billion active subscriptions, boosting investor confidence.
Challenges in iPhone Sales and China Market
Despite overall revenue growth, iPhone sales declined year-over-year, marking Apple’s biggest revenue miss in two years. The China market saw a significant dip of 11.1%, influenced by:
✔️ Limited rollout of Apple Intelligence AI
✔️ A shift in channel inventory
✔️ China’s recent national subsidy program
Mac and iPad Sales Rebound
Apple saw a 15% growth in Mac and iPad sales, thanks to the launch of new iMacs, MacBook Pros, and iPad Mini models. These strong results reflect increasing demand for Apple’s updated product lineup.
Record-Breaking Profit Margins
Apple reported a record gross margin of 46.9%, exceeding expectations. The company projects margins between 46.5% and 47.5% for the next quarter, reinforcing its profitability.
What’s Next for Apple?
Apple anticipates low to mid-single-digit revenue growth in the coming quarter, with the Services segment expected to see double-digit growth. The company remains optimistic about expanding Apple Intelligence AI to new languages, including Simplified Chinese in April 2025.
Final Thoughts
While Apple’s iPhone revenue missed expectations, strong services growth and rising Mac and iPad sales helped offset the decline. With a positive earnings outlook, investors remain optimistic about Apple’s future.
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