Apple's profits rise despite China sales slump
Apple's revenue grew by 4 percent in the first quarter of the fiscal year but did not meet Wall Street's expectations for iPhone sales. Investors were concerned about the 11.1 percent decline in sales in China. In after-hours trading, Apple shares are slightly losing value.
The American giant is making progress. Apple's earnings per share amounted to $2.40 compared to the $2.35 estimated by analysts. Revenues reached $124.30 billion compared to the estimated $124.12 billion.
iPhone revenues also appear strong, totalling $69.14 billion versus the estimated $71.03 billion. Revenues from Mac computers were $8.99 billion compared to the estimated $7.96 billion. iPad revenues were $8.09 billion compared to the estimated $7.32 billion. Revenues from other products were $11.75 billion compared to the estimated $12.01 billion.
- Apple's quarterly service revenue amounted to $26.34 billion compared to the estimated $26.09 billion.
- Gross margin reached 46.9 percent compared to the estimated 46.5 percent.
Only the condition in China is worrisome
The company noted a significant decline in China, which includes the mainland, Hong Kong, and Taiwan. Overall sales in China fell by 11.1 percent during the quarter to $18.51 billion. This is the largest sales decline in China since the same quarter last year, when it fell by 12.9 percent.
Apple's CEO, Tim Cook, told CNBC that iPhone sales were higher in countries where Apple Intelligence is available. Currently, the software is available only in a few English-speaking countries and is not available in China or in the Chinese language.
The company recorded a net profit of $36.33 billion in the quarter, marking a 7.1 percent increase from $33.92 billion in the same period last year.
Sales of Apple's iPads and Mac computers showed strong growth compared to last year's holiday quarter sales. Revenues from Mac computers increased by 15 percent to $8.98 billion, and revenues from iPads increased by 15 percent to $8.08 billion.
In this quarter, the company released new Mac computers, including new iMac laptops, Mac Mini, and MacBook Pro in October, which partly contributed to the growth. During this quarter, Apple also launched a new iPad Mini.
It's driven by the significant excitement around our latest Mac lineup – Tim Cook told CNBC.
Apple's profit engine, its services division, which includes subscriptions, warranties, and licensing agreements, recorded $23.12 billion in revenue, a 14 percent increase from the same period last year.
A billion subscriptions
Apple CEO Tim Cook said on CNBC that the company has over 1 billion subscriptions, which includes direct subscriptions to services like Apple TV+ and iCloud, as well as third-party app subscriptions through the App Store.
The company's "other products" category, also known as Wearables, which includes sales of the Apple Watch, AirPods, Beats, and Vision Pro, fell by 2 percent year-over-year to $11.75 billion.
Apple announced that it would pay a dividend of 25 cents per share. The company spent $30 billion on dividends and share buybacks in the first quarter.
