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Apple got out of a recent iPhone sales slump during its summer quarter, an early sign that its recent efforts to revive demand for its marquee product with an infusion of artificial intelligence are paying off.
Sales of the iPhone totaled $46.22 billion for the July-September period, a 6% increase from the same time last year, according to Apple’s fiscal fourth-quarter report released Thursday. That improvement reversed two consecutive year-over-year declines in the iPhone’s quarterly sales.
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The iPhone boost helped Apple deliver total quarterly revenue and profit that exceeded the analyst projections that sway investors, excluding a one-time charge of $10.2 billion to account for a recent European Union court decision that lumped the Cupertino, California, company with a huge bill for back taxes.
Apple earned $14.74 billion, or 97 cents per share, a 36% decrease from the same time last year. If not for the one-time tax hit, Apple said it would have earned $1.64 per share — topping the $1.60 per share predicted by analysts, according to FactSet Research. Revenue rose 6% from last year to $94.93 billion, about $400 million more than analysts forecast.
Apple released its earnings report on Thursday, revealing a drop in overall revenue fueled by slackening iPhone sales.
Earnings exceeded market expectations, however, and Apple’s shares rose in after-hours trading. Tim Cook, Apple’s chief executive, said in a statement released before the call that “Apple is reporting revenue of $90.8bn for the March quarter, including an all-time revenue record in services”.
The iPhone manufacturer reported revenue of $90.8bn, down 4% year-over-year, but surpassing anticipated earnings of $90.1bn. It declared $0.25 in cash dividend for each share, an increase of 4%. iPhone revenue was $45.96bn, down 10% from the same time period last year, whereas Wall Street’s estimations were $46bn. The company also reported that its board had authorized a $110bn stock buyback.
“Longer term, I think that Apple’s shift to a service business model is a robust approach to compensate for its dependence on iPhone sales performance,” said Forrester vice-president and principal analyst Thomas Husson.
Apple unseated Samsung late last year as the world’s largest smartphone provider, capturing about 20% of the global market share. Shipments of Apple’s smartphones declined in the first quarter of this year, however, as Chinese competitors such as Huawei gained ground. Samsung, which saw a lighter fall in its shipments than Apple, took back the top spot among smartphone makers in the first months of 2024.
