Apple Posts Strong Q4 Earnings, Driven by iPhone and Services Growth
Apple’s fiscal fourth-quarter earnings report exceeded analyst estimates, driven by strong demand for its iPhone 16 and continued growth in its services segment. The company reported revenue of $94.93 billion, beating estimates of $94.36 billion.
iPhone 16 Demand Remains Strong
Tim Cook, Apple’s CEO, highlighted the success of the iPhone 16, stating that sales were “stronger than 15 in the year-ago quarter, and 16 was stronger than 15.” The company’s iPhone revenue grew 6% year over year to $46.22 billion, surpassing analyst estimates of $45.04 billion.
Services Segment Hits New Milestone
Apple’s services segment, which includes Apple TV+, Apple Music, and the App Store, reached a new milestone with a $100 billion run rate. The company’s services revenue grew to $24.97 billion, slightly missing estimates of $25.27 billion.
China Revenue Misses Estimates
Revenue from China, a key market for Apple, missed estimates, coming in at $15.03 billion versus expectations of $15.8 billion. However, Cook noted that the installed base of active devices in China reached an all-time high, and the company saw sequential improvement in foreign exchange.
AI Investments Paying Off
Cook emphasized the importance of Apple’s artificial intelligence (AI) investments, stating that they are “changing my daily life.” The company’s AI features, including Apple Intelligence, are expected to drive growth in the coming quarters.
Guidance for Holiday Quarter
Apple provided guidance for the holiday quarter, expecting sales growth in the low to single digits. The company also announced plans to launch new Apple Intelligence features in December.
CFO Luca Maestri’s Final Earnings Call
The earnings call marked the final appearance of CFO Luca Maestri, who will transition to a new role in January. Cook thanked Maestri for his contributions to the company, saying he “shaped Apple as we know it today.”
Analyst Reaction
Analysts reacted positively to the earnings report, with many highlighting the company’s resilience in the face of market headwinds. Jacob Bourne at Emarketer noted that Apple’s earnings “show its resilience in the face of market headwinds, with iPhone demand improving in China where premium models sales surpassed expectations.”
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