Apple’s latest AI-enabled iPhones helped the company surpass Wall Street’s earnings expectations for the fourth quarter of 2024, though a conservative forecast for the next quarter led to a drop in Apple’s share price. On October 31, Apple reported revenue of $94.9 billion for the quarter, a 6.1% increase from the previous year and just above analysts’ estimate of $94.6 billion. Earnings per share came in at $1.64, higher than last year’s $1.46 and well above Wall Street’s prediction of $1.49.
Sales of Apple’s flagship iPhone rose by 5.5% from a year ago to $46.2 billion, surpassing the estimated $45.5 billion. This performance included only eight days of sales for the new iPhone 16, which was launched on September 20.
Apple has integrated AI features into its newer devices, including iPhones, iPads, and Macs, aiming to meet rising consumer demands for AI-driven functionalities.
Despite this, Apple’s AI feature, called “Apple Intelligence,” is still in beta, available only in U.S. English, and currently limited to newer models like the iPhone 16 and the Pro versions of the iPhone 15. Apple has promised additional features and language support in December, but users interested in Apple’s AI need to upgrade to these latest models.
Looking ahead, Apple’s Chief Financial Officer Luca Maestri noted that the company expects revenue growth of just low to mid-single digits for the December quarter, falling short of Wall Street’s target of 6.5% growth to $127.5 billion. CEO Tim Cook and other executives refrained from discussing iPhone sales projections for this period, particularly for China, where the new AI features are currently unavailable.
Following the earnings report, Apple’s stock closed down 1.82% at $225.91 and continued to slide 1.86% after hours to $221.71. Although Apple’s stock is up by around 21.7% this year, lower-than-expected sales in China, totaling $15 billion instead of the forecasted $16.3 billion, may have contributed to the post-market dip.
Conclusion
While Apple’s AI-enhanced iPhones have helped the company exceed Q4 expectations, its cautious outlook and limited AI accessibility could pose challenges. Expanding AI functionality and tapping into key markets like China could be essential for Apple’s sustained growth in an increasingly competitive landscape.
Source: https://www.reuters.com/technology/apple-beats-wall-street-estimates-supported-by-iphone-sales-2024-10-31/
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