Quiver Quantitative - In the pivotal holiday quarter, Apple (NASDAQ:AAPL) projected a less-than-expected sales outlook, with shares stumbling by 3.5% in the aftermath. Despite the iPhone 15 models gaining momentum in China and contributing to a record September quarter in the region, the forecast failed to meet the optimistic 4.97% growth to $122.98 billion anticipated by Wall Street analysts. Apple's resilience in a tough smartphone market seemed to wobble as iPad and wearable demand weakened, overshadowing the positive earnings and revenue figures that slightly surpassed expectations.
Apple's fiscal fourth-quarter report painted a mixed picture, showing a slight sales dip to $89.50 billion, yet modestly outdoing the predicted $89.28 billion. The earnings narrative was bolstered by an 11% rise in net income and earnings per share of $1.46, which edged past the $1.39 estimate. Despite this financial buoyancy, China, a crucial market for Apple, showed a revenue decrease of 2.5%, although CEO Tim Cook highlighted growth in the region after adjusting for currency fluctuations. Cook's reassurance about balancing supply and demand for the new iPhone 15 Pro and Pro Max later in the quarter aimed to mollify concerns about current constraints.
Apple's standing in the global smartphone arena faces renewed challenges from Huawei Technologies, rebounding with chip-independent devices after U.S. trade restrictions had cornered it out of the competition. While Apple's sales in China contracted slightly, Cook emphasized the success of iPhones in urban China, supporting the company's positive outlook. In the backdrop of evolving trends, Apple's strategic engagement with generative artificial intelligence signified a commitment to innovation, aligning with industry giants like Microsoft (NASDAQ:MSFT) and Alphabet's Google (NASDAQ:GOOGL) in this burgeoning tech domain.
Despite the stronghold of iPhone sales, which aligned with expectations, Apple's product portfolio showed mixed results. Mac and iPad sales experienced significant downturns, and the wearables segment also recorded a decrease, failing to meet projections. However, Apple's services segment, inclusive of offerings like Apple TV+, surged by 16% to $22.31 billion, outperforming the anticipated $21.35 billion and hinting at a resilient diversification of revenue streams.
This article was originally published on Quiver Quantitative