Apple released its fiscal fourth-quarter earnings, surpassing expectations for both earnings per share (EPS) and revenue. However, the report revealed that the tech giant experienced a decline in overall sales for the fourth consecutive quarter. Every hardware division, with the exception of the iPhone, reported year-over-year declines, particularly in the iPad and Mac segments.
The earnings report indicated the following key figures compared to LSEG (formerly Refinitiv) consensus expectations:
– EPS: $1.46 per share vs. $1.39 per share expected
– Revenue: $89.5 billion vs. $89.28 billion expected
– iPhone revenue: $43.81 billion vs. $43.81 billion expected
– Mac revenue: $7.61 billion vs. $8.63 billion expected
– iPad revenue: $6.44 billion vs. $6.07 billion expected
– Wearables revenue: $9.32 billion vs. $9.43 billion expected
– Services revenue: $22.31 billion vs. $21.35 billion expected
– Gross margin: 45.2% vs. 44.5% expected
Apple did not provide formal guidance for the upcoming quarter. However, Luca Maestri, Apple’s Chief Financial Officer, stated that the company anticipates December quarter revenue to be “similar to” the previous year, although this year’s December quarter will have one fewer week.
Analysts had anticipated revenue of $122.98 billion for the December quarter, marking a potential return to year-over-year growth, a significant development in Apple’s most crucial quarter.
Apple’s net income for the fiscal year’s fourth quarter was $22.96 billion, or $1.46 per share, compared to $20.72 billion, or $1.29 per share, in the same period the previous year. Despite quarterly revenue decreasing by less than 1% in the September quarter, Apple reported full fiscal year sales of $383.29 billion, representing a 3% decline from the prior year.
Apple’s iPhone sales aligned with Wall Street expectations, growing over 2% compared to the previous year. Notably, the iPhone was the only hardware category to experience growth during the quarter. Apple’s CEO, Tim Cook, commented on the strong performance of the new iPhone 15, highlighting that it outperformed the previous year’s iPhone 14 during the same quarter.
Mac and iPad businesses, however, witnessed significant declines during the quarter, with Mac sales falling by nearly 34% year over year, contrary to Wall Street predictions. Maestri had previously cautioned that both iPad and Mac sales would experience double-digit percentage drops.
In contrast, Apple’s services business proved to be a bright spot, exceeding analyst expectations by recording $22.31 billion in services revenue, marking a 16% increase from the previous year. This segment encompasses various services, including iCloud storage, Apple Music, and warranties from AppleCare. Additionally, Apple’s agreement with Google for the default search engine on its Safari browser contributed significantly to this segment, with payments estimated to reach $19 billion in the current year.
Apple’s wearables business, which includes products like AirPods and Apple Watch, reported a decline of over 3% year over year.
The company’s performance in Greater China, its third-largest market, was closely monitored, with sales remaining relatively flat year over year, generating $15.08 billion from the region, including Hong Kong and Taiwan.
Apple continues to maintain substantial cash and cash-like securities, with $162.1 billion in cash on hand, all while actively managing its cash through share repurchases and dividend payments. Apple announced a dividend of 24 cents per share for the current month and disclosed $25 billion spent during the quarter on share repurchases and dividends.