May 2, 2024 - Technology

Apple sees revenue drop, though it narrowly tops earnings expectations

Apple CEO Tim Cook, speaking at a September 2018 launch event.

Apple CEO Tim Cook, speaking at a September 2018 launch event. Image: Apple

Apple on Thursday reported that quarterly sales dropped 4% from the same period a year ago, but the company narrowly topped expectations for both revenue and per-share earnings.

Why it matters: The iPhone maker is a bellwether for the broader tech industry, given its size and the fact that it is a major consumer of displays, chips and other components.

  • The company also announced its board had authorized $110 billion in stock buybacks, the largest in company history.

By the numbers:

  • Revenue: $90.8 billion, down 4% from the prior year, but above expectations of $90 billion per LSEG (via CNBC).
  • Per-share earnings: $1.53, above expectations of around $1.50.
  • iPhone revenue: $45.96 billion, just shy of expectations of $46 billion.
  • iPad revenue: $5.56 billion, below estimates of $5.91 billion.
  • Mac revenue: $7.45 billion, ahead of expectations of around $6.86 billion.
  • Services revenue: $23.87 billion, up 14% from the prior year and slightly above expectations of $23.27 billion.
  • Wearables, home and accessories revenue: $7.91 billion, below estimates of $8.08 billion.

On a geographic basis, Apple saw sales drop in every region except Europe.

What's next: The earnings report comes ahead of a media event next Monday, at which Apple is expected to debut new iPads. Apple's annual developer conference starts June 10, and the company is likely to further detail its AI strategy there.

What they're saying: On a conference call with analysts, CFO Luca Maestri said to expect the June company quarterly revenue to grow "in the low single digits," despite some negative impact from foreign exchange rates. Maestri added that the company expects double digit growth in both its iPad and services business.

  • CEO Tim Cook also noted that this past quarter's sales dip was due in large part to a tough comparison to the prior year, in which the company was filling pent-up demand following Covid 19-related manufacturing disruptions.
  • "We estimate this one time impact added close to $5 billion to the March quarter revenue last year," Cook said. "If we removed this from last year's results, our March quarter total company revenue this year would have grown."
  • Cook expressed enthusiasm about the AI-related announcements that the company will make in the coming weeks and said "we believe that we have advantages that set us apart."
  • Asked about the impact from European legislation which forced Apple to allow third party app stores in that region, Cook said "It's really too early to answer the question," noting that the company is "focused on complying, while mitigating the impacts to user privacy and security."
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