Apple has exceeded market expectations with its fiscal 2024 third-quarter earnings, reporting record figures of $85.8 billion in revenue, marking a 5% increase year-on-year despite a decline in iPhone sales.
This strong performance coincides with growing anticipation for the upcoming launch of Apple’s next-generation iPhone, which will feature advanced artificial intelligence capabilities.
The company reported quarterly earnings of $1.40 per diluted share, an 11% increase from the previous year, translating to a net income of $21.5 billion.
These results surpassed analyst forecasts, which had predicted earnings of $1.34 per share and $20.7 billion in net income.
The revenue of $85.8 billion also exceeded expectations, driven in part by iPhone sales that reached $39.3 billion, slightly above projections despite being the lowest since September 2021.
What they said
“During the quarter, our record business performance generated EPS growth of 11 percent and nearly $29 billion in operating cash flow, allowing us to return over $32 billion to shareholders,” said Luca Maestri, Apple’s Chief Financial Officer(CFO). “We are also very pleased that our installed base of active devices reached a new all-time high in all geographic segments, thanks to very high levels of customer satisfaction and loyalty.”
Apple’s board of directors declared a cash dividend of $0.25 per share of the Company’s common stock. The dividend is payable on August 15, 2024, to shareholders of record as of the close of business on August 12, 2024.
What you should know
However, Apple’s revenue from its Greater China region, once a major growth driver, fell by 7% year-on-year to $14.73 billion, marking the fourth consecutive quarterly decline. This was notably below the $15.7 billion anticipated by analysts.
Despite the challenges, Apple achieved its highest-ever June quarter figures in both earnings per share and revenue. The market responded positively, with Apple shares climbing approximately 1% in after-hours trading, contrasting with the significant declines seen in other major tech stocks such as Amazon and Intel, which also reported earnings on Thursday.
Apple’s iPhone revenue, though surpassing expectations, remains at its lowest point since the quarter ending September 2021, reflecting a 1% decline from the same period in 2023. Analysts predict a resurgence in iPhone sales later this year with the release of the iPhone 16, which will feature a generative artificial intelligence operating system exclusive to newer models. Consensus estimates suggest iPhone sales could reach a record $73 billion during the 2024 holiday quarter.
The company’s June announcement of “Apple Intelligence”—which integrates OpenAI’s ChatGPT into Siri—has fueled considerable market enthusiasm, propelling Apple’s stock to a record high and briefly pushing its market valuation to $3.6 trillion.
Despite a recent 7% pullback amidst a broader technology sector slump, Apple’s shares remain up 13% year-to-date, reinforcing its status as the most profitable U.S. company, with a net income of $97 billion in its 2023 fiscal year.
