San Francisco (United States) (AFP) – Apple on Thursday reported a profit of $27.5 billion in the recently ended quarter, powered by iPhone and services revenue. The net income, along with revenue of $102.5 billion, beat market expectations, despite a hefty financial hit from US tariffs and a slight ebbing of revenue in China when compared with the same period a year earlier. “Apple is very proud to report a September quarter revenue record,” chief executive Tim Cook said in a release. Apple shares were up more than 2 percent in after-hours trade that followed the release of the earnings figures.
Overall sales of iPhones, the heart of Apple’s business, fell shy of market expectations, bringing in $49 billion, which was an increase from the same quarter last year. The slight miss in iPhone revenue was still “encouraging given the successful iPhone 17 line-up launch” in September, CFRA Research vice president Angelo Zino said in a note to investors. Apple’s services business, which sells digital content and subscriptions to users of its coveted gadgets, generated $28.8 billion in revenue, an increase of some $3 billion from the same quarter last year. Analyst Zino described the performance of Apple’s services business as “standout.”
“These results come at the close of an extraordinary year for Apple in which we achieved an all-time revenue record of $416 billion for the fiscal year,” Cook said. “We set an all-time revenue record for iPhone, and in services we achieved all-time records across every geographic segment.” Cook predicted that the current fiscal quarter would be the best ever for Apple.
Cook touted the latest Apple devices and the tech giant’s custom chips and efforts to enhance products and services with artificial intelligence. “As we continue to expand our investment in AI, we’re bringing intelligence to more of what people already love about our products and services,” Cook said on an earnings call. “At the heart of it all is Apple silicon…these incredibly advanced chips make Apple products the very best place to experience the power of AI.”
Apple has been under pressure to show it is not being left behind when it comes to artificial intelligence, with the potential to change how people engage with the internet and computers. Cook touted new “Apple Intelligence” features such as real-time language translation during iPhone calls and promised to release a more personalized Siri digital assistant next year.
Demand for several iPhone 16 and iPhone 17 models outstripped supply in the quarter, and Apple remains “constrained” on some models, according to executives. Not being able to meet demand was cited by Cook as among the reasons for sales in China coming in lower than the market expected. Cook expects sales in China to pick up in the current quarter as supply improves. “That is largely based on the reception of the iPhone there,” Cook said. “I couldn’t be more pleased with how things are going (in China).”
Apple Chief Financial Officer Kevan Parekh said the company’s gross margin was higher than forecast in the quarter, despite about $1.1 billion in tariff-related costs. Trump’s tariffs have cost Apple nearly $2 billion in the last two fiscal quarters, according to earnings figures. Apple kept prices of iPhones unveiled last month unchanged from last year’s equivalent models, raising concerns about its profit margin given the added expense.
© 2024 AFP
