Apple reported fiscal-fourth quarter earnings on Thursday that beat analyst expectations, and provided a strong forecast for the company’s December quarter.
Shares of the iPhone maker were flat in extended trading.
Here’s how the iPhone maker did versus LSEG consensus estimates for the quarter ending September 27:
- EPS: $1.85 vs. $1.77 estimated
- Revenue: $102.47 billion vs. $102.24 billion estimated
Here’s how Apple’s main business lines did versus consensus estimates:
- iPhone revenue: $49.03 billion vs. $50.19 billion estimated
- Mac revenue: $8.73 billion vs. $8.59 billion estimated
- iPad revenue: $6.95 billion vs. $6.98 billion estimated
- Other Products revenue: $9.01 billion vs. $8.49 billion estimated
- Services revenue: $28.75 billion vs. $28.17 billion estimated
Apple CEO Tim Cook told CNBC’s Steve Kovach that the current quarter, which ends in December, would see total company revenue grow 10% to 12% on a year-over-year basis.
“We expect total company revenue to grow by 10 to 12% year over year, we expect iPhone revenue to grow double digits, year over year, and we expect that that would make the December quarter the best ever in the history of the company,” Cook said.
Analysts polled by LSEG expect Apple to guide to $132.31 billion in December quarter sales and earnings of $2.53 per share. Apple’s guide surpasses those expectations. With 11% growth over last year’s December quarter, revenue for the upcoming period would be $137.97 billion.
Cook said that Apple was confident in its guidance because of the strong reception for the company’s new iPhone 17 devices, released in September, which he said was “off the chart.”
“We look at the results to date, the reception of the consumer on the very strong iPhone lineup,” Cook said. “We’re looking at traffic in our stores, which is up significantly year on year. We see enthusiasm around the world.”
The company had $27.46 billion in net income during the quarter versus $14.29 billion in the year-ago period, which was lower because of a one-time tax charge.
For Apple’s fiscal 2025, it had $416 billion in total revenue, a 6% increase over 2024. Sales in the September quarter rose 8% on an annual basis.
Overall iPhone revenue was up 6% to $49.03 billion, the first sign of how iPhone 17 sales are faring. Apple’s newest phones went on sale on Sept. 19, so there is just over a week of sales in this quarter.
However, LSEG analysts were looking for $50.19 billion in iPhone sales for the period.
Cook said that several iPhone models were supply constrained during the quarter — both for the iPhone 17 and last year’s iPhone 16 models.
“Actually on 16 and 17 for Q4, several models supply constrained,” Cook said. “And currently we’re supply constrained on several models of the iPhone 17.”
Apple’s iPad business was also flat during the quarter, with $6.95 billion in sales. Apple didn’t release a new model during the quarter, but it introduced an upgraded iPad Pro with an updated M5 chip in October.
The company’s services business, which includes online subscriptions such as iCloud, Apple Music, as well as App Store fees, Google search licensing, payment fees, and AppleCare warranties for hardware, grew 15% to $24.97 billion in sales. The unit is Apple’s fastest-growing and important for investors because it represents recurring revenue with a higher profit margin than hardware.
Cook said that most of the components in the Services business were seeing accelerating growth.
“It was a run of the table,” Cook said.
Other Products, a category that includes Apple Watch, AirPods and Vision Pro, declined very slightly during the quarter with sales of $9.04 billion.
Apple’s Mac business showed strong 13% growth to $8.72 billion in sales. Cook attributed the growth to strong sales of the company’s MacBook Air laptop, which were refreshed in March alongside a $100 price cut, lowering its starting price to $999.
The company’s sales in Greater China, which includes Hong Kong and Taiwan, fell 4% on an annual basis to $14.5 billion in sales. Cook said he expected China to return to growth in the December quarter.
“We expect China to return to growth this quarter because of the reception of the iPhone there, or the iPhone 17 family,” Cook said.
Cook said that the company still plans to release an updated version of Siri next year, and said that there were more forthcoming partnerships like the company’s agreement to integrate ChatGPT into Apple Intelligence.
“Our intention is to integrate with more people over time,” Cook said.
Cook said that Apple had not changed its prices in response to Trump administration tariffs.
“We held the pricing that we would have done without any tariffs, and we’re just absorbing the tariffs in gross margin,” Cook said. Apple’s gross margin was 47.2%, better than LSEG expectations of 46.4%.
