As a seasoned tech analyst with over two decades of experience, I have witnessed Apple’s meteoric rise and occasional stumbles along the way. Their latest earnings report, while impressive, leaves me somewhat apprehensive.
The enhanced iPhones from Apple Inc., which incorporate advanced artificial intelligence, surpassed Wall Street’s projected earnings, however, a subdued forecast for this current quarter has caused a decline in the company’s share price following market closure.
In a report released on October 31, 2024, Apple announced its fourth-quarter earnings for that year. The company’s revenues reached an impressive $94.93 billion, representing a 6.1% increase compared to the same period last year. This figure surpassed analyst predictions of $94.56 billion.
Its earnings per share came in at $1.64, up from $1.46 in the year-ago quarter and 10% greater than Wall Street’s estimate of $1.49.
Apple’s leading iPhone model experienced a 5.5% increase in sales compared to the previous year, amounting to $46.22 billion, surpassing forecasts of $45.47 billion. This growth was achieved over a period that included only eight days of sales for its newly released iPhone 16, which debuted on September 20.
The tech leader has recently added artificial intelligence capabilities to its latest iPhone models, along with its additional offerings such as the iPad and Mac, as a strategy to meet customer demands and stay ahead of competitors who are also focusing on AI technology.
Nevertheless, what’s been referred to as “Apple Intelligence” hasn’t quite met expectations thus far, primarily providing the notable function of summarizing notifications, but little else as advertised.
At present, it’s only available as a trial version, limited to U.S. English, and access is granted through a waiting list, but Apple assures us that additional features and more languages will be rolled out in December.
The artificial intelligence developed by Apple can be found exclusively on the latest series of devices – specifically the iPhone 16 models and the Pro variants within the iPhone 15 lineup. Consequently, individuals desiring AI capabilities on their phones will need to consider an upgrade to these newer models.
However, in a recent earnings discussion, Apple’s chief financial officer Luca Maestri predicted that the company’s quarterly revenue, wrapping up in December, would see a growth of around 1-9% compared to the same period last year. This estimate is lower than the projected growth of over 6.5%, amounting to approximately $127.5 billion, as suggested by Wall Street analysts.
During the conference call, executives like CEO Tim Cook evaded answering questions regarding their expectations for iPhone sales this quarter, particularly in China – a significant market where advanced AI features are absent, and Apple has yet to disclose when these features will become available.
On October 31st, Apple (AAPL) ended the day with a decrease of 1.82%, closing at $225.91. Subsequently, after market hours, it dropped an additional 1.86%, reaching $221.71 according to Google Finance. Despite this daily decline, its share price has climbed approximately 21.7% throughout the year.
As an analyst, I found that my projected sales for the China region by the tech giant were higher than their actual reported figure of $15.03 billion, with an estimated revenue of $16.34 billion. This discrepancy might have played a role in the decline of its stock price during after-market hours.
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2024-11-01 09:09