Apple (AAPL) has reported fourth-quarter financial results that beat Wall Street estimates as growth in the company’s “services” made up for a decline in iPhone sales.
The Silicon Valley-based company announced earnings per share (EPS) of $2.40 U.S., which was better than consensus estimates of $2.35 U.S.
Revenue in the quarter totaled $124.30 billion U.S., which was slightly ahead of forecasts that called for $124.12 billion U.S. Sales were up 4% from a year earlier.
The decent results come despite poor sales of Apple’s signature iPhone device. Sales of the iPhone in China declined 11% during Q4 from a year ago.
Worldwide iPhone revenue in the period totaled $69.14 billion U.S., which fell short of forecasts of $71.03 billion U.S.
However, MacBook revenue of $8.99 billion U.S. and iPad sales of $8.09 billion U.S. each beat consensus expectations and were up 15% from the same quarter in 2023.
Additionally, Apple’s “Services” revenue of $26.34 billion U.S. topped expectations of $26.09 billion U.S., and the company’s gross margin of 46.9% was better than the 46.5% estimated.
The bright spot in the quarter was Apple’s Services division, which includes subscriptions, warranties and licensing deals. It grew 14% over the same period last year.
Apple said it now has more than one billion subscriptions, which include everything from Apple TV+ and iCloud to third-party apps through the company’s App Store system.
Also, Apple’s gross margin of 46.9% was the highest on record, surpassing the 46.6% margin the company recorded in the period ending March 2024.
However, despite the success, the iPhone sales decline was the biggest for the company in two years.
Also, the company’s “other products” category that includes the Apple Watch, AirPods, Beats, and Vision Pro saw sales decline 2% on a year-over-year basis to $11.75 billion U.S.
Apple doesn’t provide traditional forward guidance. It did say that it would pay a dividend of $0.25 U.S. per share for the current quarter.
The stock of Apple has risen nearly 30% in the last 12 months to trade at $237.59 U.S.
