Apple Stock: iPhone Maker Tops Fiscal Q1 Goals

Consumer electronics giant Apple (AAPL) late Thursday beat Wall Street’s targets for its fiscal first quarter, thanks to iPhone 15 handset sales and services growth. But Apple stock fell in extended trading as sales declined in China. Also, Apple’s guidance pointed to weak sales in the current quarter.

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The Cupertino, Calif.-based company earned $2.18 a share on sales of $119.6 billion in the quarter ended Dec. 30. Analysts polled by FactSet had expected Apple earnings of $2.10 a share on sales of $118 billion. On a year-over-year basis, Apple earnings increased 16% while sales rose 2%.

With its Q1 report, Apple returned to revenue growth after four quarters in a row of declining sales on a year-over-year basis.

China was the only region where sales didn’t grow for Apple. In the December quarter, Apple’s sales in China fell 12.9% year over year to $20.8 billion. Domestic smartphone vendors, such as Huawei, have been drawing away customers from Apple in China.

Apple Stock Retreats After Report

On a conference call with analysts, Apple Chief Financial Officer Luca Maestri implied weaker-than-expected sales for the March quarter. His directional guidance suggested overall revenue of $89.8 billion, vs. the FactSet consensus estimate of $95.6 billion for the fiscal second quarter.

In the year-earlier quarter, Apple posted revenue of $94.8 billion, which benefited from $5 billion in iPhone sales that couldn’t be fulfilled in the December quarter because of Covid-related factory shutdowns. Also, last year’s fiscal second quarter included an extra week of sales, he said.

In after-hours trading on the stock market today, Apple stock dropped 3.3% to 180.77. During the regular session Thursday, Apple stock climbed 1.3% to close at 186.86.

Services Revenue Rose 11%

“Today Apple is reporting revenue growth for the December quarter fueled by iPhone sales, and an all-time revenue record in Services,” Chief Executive Tim Cook said in a news release.

He added, “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.”

In the December quarter, Apple’s hardware sales rose a fraction year over year to $96.5 billion while services revenue climbed 11% to $23.1 billion.

Apple’s iPhone revenue increased 6% to $69.7 billion and accounted for 58% of the company’s total sales in fiscal Q1.

Meanwhile, Apple’s Mac computer sales rose a fraction to nearly $7.8 billion. However, iPad tablet sales plummeted 25% year over year to $7 billion.

Finally, revenue from Apple’s wearables, home and accessories unit declined 11% to about $12 billion.

AAPL Stock Has Formed A Base

On Friday, Apple will officially begin sales of its Apple Vision Pro spatial computer. The headset is the company’s first major product launch since the Apple Watch debuted almost nine years ago.

Apple stock has formed a cup-with-handle base with a buy point of 196.38, according to IBD MarketSmith charts. AAPL stock hit an all-time high 199.62 on Dec. 14.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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