(Jan 30): Apple Inc delivered record quarterly sales and a better-than-anticipated forecast for the current period, even as the company warned that rising component costs are threatening to squeeze margins.
Revenue will rise 13% to 16% in the second quarter, which runs through March, the company said Thursday during a conference call with analysts. That exceeded the 10% projected by Wall Street — showing that Apple can maintain momentum after an iPhone-fueled sales surge in the December quarter.
Still, the specter of rising memory prices clouded the results. After a minimal effect last quarter, the company expects “more of an impact” to gross margins in the current period, chief executive officer Tim Cook said.
“We do continue to see market pricing for memory increasing significantly,” he said.
The concerns weighed on Apple shares, which fluctuated in late trading after the results were released. They were up about 1% as of 5.39pm in New York. The stock had been down 5% this year, compared with a 1.8% gain for the S&P 500 Index.
Revenue during the holiday season trounced Wall Street estimates, driven by strong demand for the new iPhone 17, growth in services and a rebound in China.
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Sales jumped 16% to US$143.8 billion in the period ended Dec 27. Analysts had estimated US$138.4 billion on average, according to data compiled by Bloomberg. Apple’s own projections were for an increase 10% to 12%.
“IPhone had its best-ever quarter driven by unprecedented demand, with all-time records across every geographic segment,” Cook said in the statement announcing the results.
The results reflected the success of Apple’s latest iPhone, a product line that accounts for roughly half its revenue. Higher-end versions of the device have been especially popular, helping further fuel sales and profit for the company.
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But there were weak spots in the quarter, including Apple’s Mac and wearables businesses. The company is also facing concerns about its artificial intelligence push, which is getting an overhaul this year after recent stumbles. And Apple is coping with tariffs, which it previously said would create a US$1.4 billion headwind in the holiday period.
The Cupertino, California-based company regained its title as the No. 1 smartphone seller globally in recent months, overtaking Samsung Electronics Co.
“Yet maintaining that dominance is perhaps more uncertain than ever, hinging on the right calls around pricing and developing the next generation of devices, particularly wearables and the anticipated foldable iPhone,” Emarketer analyst Jacob Bourne said in a note.
Earnings rose to US$2.84 a share in the fiscal first quarter, beating an average estimate of US$2.68. In China, Apple reported revenue of US$25.5 billion, up 38% from a year earlier. Wall Street had projected US$21.8 billion from that vital market.
Revenue from the iPhone totaled US$85.3 billion during the period, topping the estimate of US$78.3 billion. Apple itself projected a double-digit percentage increase. The sales ultimately grew 23% from a year earlier.
Services were another growth driver, generating US$30 billion in the quarter. That was up 14% from the year-ago quarter and in line with estimates.
Mac revenue fell 6.7% to US$8.39 billion, missing expectations of US$9.13 billion. The iPad, meanwhile, generated US$8.6 billion in sales, up 6.3% from the year-ago quarter. That topped Wall Street’s US$8.18 billion estimate.
Apple’s Wearables, Home and Accessories division remained sluggish. Its sales fell 2.2% to US$11.5 billion. Analysts had been expecting US$12.1 billion.
Uploaded by Isabelle Francis
