Apple (AAPL) stock ended Friday’s trading slightly positive, despite Thursday’s third-quarter results showing a year-over-year drop in iPhone sales.
Wall Street was closely watching Apple’s performance in China, one of its most important markets. The company has been fighting to regain market share from domestic rivals such as Huawei, but has fallen short of expectations in the region.
Apple expected sales in Greater China to be the highest at $14.7 billion. Analysts surveyed by Bloomberg had expected sales of $15.2 billion. Apple reported sales in China of $15.7 billion in the same period last year. Overall iPhone sales came in at $39.2 billion, compared to expectations of $38.9 billion, falling short of Apple’s $39.6 billion in Q3 2023.
Despite the setback, Apple CFO Luca Maestri told Yahoo Finance’s Josh Lipton that the company’s sales in the region are generally improving. Additionally, Maestri said Apple is experiencing record growth in the country, and sales were better than in the first half of this year.
For the quarter, Apple had earnings per share (EPS) of $1.40 on revenue of $85.5 billion. Analysts had expected EPS of $1.35 and revenue of $84.4 billion, according to estimates compiled by Bloomberg. Apple had EPS of $1.26 and revenue of $81.7 billion in the same period last year.
Despite a difficult start to the year, Apple’s stock price has risen about 18.6% year-to-date. This was partly due to the Worldwide Developer Conference in May, where the company showed off its Apple Intelligence software.
Apple CEO Tim Cook opens the Apple Worldwide Developers Conference. (Justin Sullivan/Getty Images) · Justin Sullivan via Getty Images
Services revenue reached $24.2 billion. Wall Street had expected the division’s revenue to be $23.9 billion. Apple’s iPad sales exceeded $7.1 billion, beating analysts’ expectations of $6.6 billion, driven by the strong performance of the company’s new iPad Pro series.
Mac sales reached $7 billion, surpassing the segment’s $6.8 billion last year. However, wearable sales fell to $8 billion from the $8.2 billion Apple reported last year.
Apple is also preparing to release its long-awaited Apple Intelligence software later this fall. The software leverages Apple’s generative AI technology and is expected to arrive on iPhones, iPads and Macs in October, according to Bloomberg’s Mark Garman.
Analysts are divided on the potential impact of Apple Intelligence on iPhone sales over the next year, with some saying the software will start a new supercycle in iPhone sales and others saying the technology will help Apple Others have more bearish forecasts for the impact on earnings.
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