Apple returned to revenue growth in its fiscal third quarter as sales were up 5% to $85.8 billion. Earnings were $1.40 a share
Analysts had expected the company to earn $1.34 a share on $84.4 billion in the third quarter.
Expectations for Apple's June quarter were muted ahead of the launch of Apple Intelligence, a platform that is expected to drive an iPhone upgrade cycle. Executives from wireless carriers have noted on earnings conference calls that customers were holding back ahead of the new iPhone launch.
CEO Tim Cook said Apple is also spending heavily on generative AI. "We continue to invest significantly in the innovations that will enrich our customers' lives, while leading with the values that drive our work," said Cook.
More:
- Apple's genAI strategy: On-device processing, private cloud, own the integration and abstract the LLMs
- PGA Tour eyes spatial computing, new models
- Apple launches M4 ahead of what's likely to be AI-heavy WWDC
- Apple Vision Pro could rev hybrid work, video collaboration
By the numbers for the third quarter:
- Apple iPhone sales in the third quarter were roughly flat at $39.3 billion, down from $39.7 billion a year ago.
- Mac sales were $7 billion, up from $6.84 billion a year ago.
- iPad revenue of $7.16 billion, up from $5.79 billion a year ago.
- Wearables revenue was $8.1 billion, down from $8.28 billion a year ago.
- Services revenue was $24.21 billion, up from $21.2 billion a year ago.
- revenue, which is closely watched, had third revenue of $14.73 billion, down from $15.76 billion a year ago. Apple showed sales gains in all other geographies.
Speaking on an earnings conference call, Cook made the following points:
- "We are very excited about Apple intelligence and we remain incredibly optimistic about the extraordinary possibilities of AI and its ability to enrich customers lives. We will continue to make significant investments in this technology and dedicate ourselves to the innovation that will unlock its full potential."
- "We've seen great interest provision pro in the enterprise, where it can empower companies large and small to pursue their best ideas like never before."
- "We achieved revenue records in the majority of the services categories with all time revenue records in advertising, cloud and payment services."
- "With Apple Intelligence, we're very excited and about the level of value that we're going to provide to users. We believe that that presents another reason for a compelling upgrade."
- Regarding China, Cook noted more than 50% of the decline was currency related. "If you look at iPhone in particular for Greater China, the installed base set a record. We also in mainland China set a June quarter record for operators. And so that that's a very strong signal. We continue to be confident in the long term opportunity in China," he said.
