Apple reported fourth-quarter earnings that exceeded Wall Street expectations. The company posted earnings per share of $1.85, beating the consensus estimate of $1.77.
Revenue reached $102.5 billion, slightly above the expected $102.2 billion. Shares climbed 4% in extended trading following the report.
The iPhone business generated $49.03 billion in revenue. This came in just below analyst estimates but represented a 6% increase from the previous year.
Apple Inc., AAPL
CEO Tim Cook described iPhone 17 demand as “off the chart.” Several models are currently facing supply constraints due to high customer interest.
Store traffic and online orders are running ahead of last year’s levels. Cook expects the December quarter to deliver the best iPhone revenue in Apple’s history.
The iPhone 17 lineup includes refreshed designs and improved camera systems. The Pro and Pro Max models received the most attention from upgraders.
Apple also launched the iPhone Air to replace the Plus line. The new model focuses on a thinner and lighter design.
Greater China revenue fell to $14.49 billion. This missed the forecast of $16.4 billion by a wide margin.
Cook said he expects China to return to growth in the next quarter. He pointed to early iPhone 17 adoption rates as a positive indicator.
Despite the China weakness, total quarterly revenue grew 8% year over year. CFO Kevan Parekh noted record-high active device users across all product categories.
The Services segment delivered $28.7 billion in revenue. This beat expectations and grew 15% from the previous year.
Services includes iCloud storage, Apple Music subscriptions, App Store fees, and AppleCare warranties. The division has become a key profit driver for the company.
Mac revenue jumped 13% to $8.73 billion. Strong MacBook Air sales followed a recent $100 price reduction.
iPad brought in $6.95 billion. Wearables, which includes Apple Watch and AirPods, generated $9 billion in revenue.
Apple projects December quarter revenue growth of 10-12% year over year. This forecast exceeded analyst expectations going into the report.
Gross margin reached 47.2%, beating the 46.4% estimate. This happened despite $1.1 billion in added tariff costs during the quarter.
Parekh said tariff expenses will increase to $1.4 billion in the December quarter. He confirmed Apple will not adjust pricing in response to these costs.
The company continues to expand its AI initiatives. Updates to Siri and ChatGPT integration through Apple Intelligence are planned for next year.
Apple’s market cap recently crossed $4 trillion. The company joins Microsoft and Nvidia as the only firms to reach this valuation milestone.
The stock is up nearly 1% year-to-date. Apple remains one of the largest components of the tech-heavy Nasdaq index.
Parekh highlighted that active device users reached a new all-time high. This metric tracks customers who have used an Apple device in the past 90 days.
The December quarter forecast represents Apple’s most optimistic outlook in recent years. Cook said supply constraints on iPhone 17 models should ease as production ramps up.
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