Apple FYQ1 Revenue Rises, Ending Sales Slump; IPhone Sales A Beat; Growth Slows In Greater China

Apple beat on the top and bottom line today, but investors nudged the shares lower as sales fell in China and the company didn’t deliver the blowout the Street seemed to want.

Revenue of $119.6 billion beat expectations and was up for the first time after four quarters of declining sales. Apple had told investors to expect revenue to be about flat with a year ago.

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Earnings per share of $2.18 were higher than $2.11 anticipated and up from $1.88 the year before.

“Today Apple is reporting revenue growth for the December quarter fueled by iPhone sales and an all-time revenue record in Services,” said CEO Tim Cook. “We are pleased to announce that our installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments. And as customers begin to experience the incredible Apple Vision Pro tomorrow, we are committed as ever to the pursuit of groundbreaking innovation — in line with our values and on behalf of our customers.”

Added CFO Luca Maestri: “Our December quarter top-line performance combined with margin expansion drove an all-time record EPS of $2.18, up 16 percent from last year.”

He added: “During the quarter, we generated nearly $40 billion of operating cash flow, and returned almost $27 billion to our shareholders. We are confident in our future, and continue to make significant investments across our business to support our long-term growth plans.”

Apple’s numbers – and Amazon’s and Meta’s, also reporting earnings today — are being closely watched after two big tech companies, Alphabet and Microsoft, disappointed the Street. Apple shares surged 50% last year but slowed in 2024, reflecting concerns over softening iPhone sales growth and slower-than-hoped-for AI development. They were down about 2% in after-market trade today after the numbers.

IPhone sales of $69.7 billion were up from $65.8 billion and above Wall Street consensus.

Total sales in greater China fell to $20.8 billion from $23.9 billion, but Apple had record sales in Europe and Asia Pacific.

Services sales jumped but came in a bit shy of forecasts. That division includes Apple TV+ as well as Apple Music, Apple News, Apple Arcade, Apple Books, Podcasts, Fitness and others. None is broken out. Sales of $23.1 billion were up from $20.8 billion.

Sales of Mac computers, which hit a milestone 40th anniversary, rose 1% to $7.8 billion.

IPad revenue of $7 billion fell 25% due to tough comparison with new editions in the year-earlier quarter.

And Wearables and Accessories fell 11% — also due to tough comps from the year earlier.

Execs on a call started at 5 p.m. ET noted that the 2023 fiscal first quarter had one week less than the year earlier period, so the numbers aren’t exactly comparable.

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