Apple’s latest earnings report, bolstered by AI-enhanced iPhones, exceeded Wall Street’s expectations, yet a lackluster forecast for the upcoming quarter led to a decline in its share price after the announcement.
In its fourth-quarter results for 2024, released on October 31, Apple revealed revenues of $94.9 billion, marking a 6.1% increase from the previous year and surpassing analyst predictions of $94.6 billion. The company reported earnings per share of $1.64, up from $1.46 in the same quarter last year and exceeding Wall Street’s estimate of $1.49 by 10%.
Sales of Apple’s flagship iPhone rose by 5.5% year-over-year to $46.2 billion, beating projections of $45.5 billion. Notably, this quarter included only eight days of sales for the newly launched iPhone 16, which debuted on September 20.
In an effort to remain competitive with both consumer demands and rival AI-driven companies, Apple has integrated artificial intelligence features into its latest iPhones, as well as its iPads and Macs. However, the much-anticipated “Apple Intelligence” has yet to fully deliver on its promise, primarily offering the ability to summarize notifications.
Currently in beta and available only in U.S. English with a waitlist for access, Apple has indicated that additional features and language options will be introduced in December. It’s important to note that Apple’s AI capabilities are exclusive to the newest iPhone 16 and the Pro models of the iPhone 15 series, meaning customers wishing to utilize AI will need to upgrade their devices.
Despite this, Apple’s Chief Financial Officer, Luca Maestri, stated during the earnings call that the company anticipates revenue growth in the low to mid-single digits year-over-year for the upcoming quarter ending in December—falling short of Wall Street’s expectations of over 6.5% growth, translating to around $127.5 billion.
During the call, executives, including CEO Tim Cook, sidestepped queries regarding potential iPhone sales performance in the upcoming quarter, particularly in China, one of Apple’s largest markets, where the AI features are currently unavailable. Apple has not disclosed when these features will be rolled out in that region.
Following the earnings announcement, Apple’s stock dropped by 1.82% to $225.91 on October 31, with an additional decrease of 1.86% after hours, bringing it down to $221.71, according to Google Finance. Nonetheless, the company’s share price has risen approximately 21.7% over the course of this year.
Apple reported that sales in its China region totaled $15 billion, falling short of the $16.3 billion anticipated by analysts, which may have contributed to the decline in its stock price after market hours.