Editor’s note: This story has been updated with additional details from Apple’s quarterly report and to more accurately describe Apple’s year-over-year revenue growth as being in the mid-single digits.
Apple, Inc. AAPL reported third-quarter earnings Thursday that exceeded expectations and revenue that grew year-over-year and came in ahead of the Street forecast. The outperformance was aided by strong showings across product categories. Apple shares, which have risen nearly in-line with the broader market this year, fell 1.08% to $216 in after-hours trading, according to Benzinga Pro data.
The stock weakness is apparently due to Apple’s China and Services performance as well as Mac revenue modestly trailing expectations.
Apple’s Key Q3 Numbers: Cupertino, California-based Apple reported mid-single-digit percentage year-over-year revenue growth for the third quarter, an improvement from the 4.31% decline in the second quarter and in line with the company’s guidance issued on the second-quarter earnings call.
Here are the comparisons versus the consensus and prior-year periods:
| Q3’24 Actuals | Q3’24 Consensus* | Q3’23 | Q2’24 | |
| Revenue | $85.78B | $84.53B | $81.80B | $90.75B |
| Non-GAAP EPS | $1.40 | $1.35 | $1.26 | $1.53 |
| Gross margin | 46.26% | N/A | 44.26% | 46.58% |
Commenting on the results, Tim Cook, CEO of Apple, said, “Today Apple is reporting a new June quarter revenue record of $85.8 billion, up 5% from a year ago.”
“During the quarter, we were excited to announce incredible updates to our software platforms at our Worldwide Developers Conference, including Apple Intelligence, a breakthrough personal intelligence system that puts powerful, private generative AI models at the core of iPhone, iPad, and Mac.”
On its second-quarter earnings call, Apple flagged gross margin of 45.5%-46.5%, and a forex headwind of about 2.5 percentage points.
Services revenue reached a new all-time record, but was a tad below the forecast. Sales of the flagship product, the iPhone; the iPad; and Wearable, Home & Accessories products all came in above expectations. Mac revenue also came in shy of estimates.
Apple CFO Luca Maestri said: “We are also very pleased that our installed base of active devices reached a new all-time high in all geographic segments, thanks to very high levels of customer satisfaction and loyalty.”
The company generated nearly $29 billion in operating cash flow.
See Also: Everything You Need to Know About Apple Stock
Apple’s Q3 Performance By Segment: Apple’s Service revenue hit a record, while iPhone, iPad and Wearable, Home & Accessories sales beat expectations. iPad revenue rose by double-digit percentages both year-over-year and sequentially. China was a sore spot, with revenue declining both year-over-year and quarter-over-quarter.
Product Segments:
| Q3’24 | Consensus* | Y-o-Y Change | Q-o-Q Change | % of total revenue | |
| iPhone | $39.3B | $37.09B | -0.93% | -14.49% | 45.82% |
| Mac | $7.01B | $7.44B | +2.49% | -5.91% | 8.17% |
| iPad | $7.16B | $6.68B | +23.66% | +28.78% | 8.35% |
| Wearable, Home & Accessories | $8.1B | $7.51B | -2.17% | +2.40% | 9.44% |
| Services | $24.21B | $24.36B | +14.14% | +1.42% | 28.22% |
Geographic Segments:
| Q3’24 | Y-o-Y Change | Q-o-Q Change | % of total revenue | |
| Americas | $37.68B | +6.50% | +1.10% | 43.93% |
| Europe | $21.88B | +8.26% | -9.29% | 25.51% |
| Greater China | $14.73B | -6.54% | -10.02% | 17.17% |
| Japan | $5.1B | +5.81% | -18.53% | 5.95% |
| Rest of Asia-Pacific | $6.39B | +13.50% | -4.91% | 7.45% |
Apple Shareholder Returns: Apple's board declared a quarterly cash dividend of 25 cents per share, payable on Aug. 15 to shareholders of record as of Aug. 12.
Look Ahead: The consensus estimates for Apple’s September quarter and full year are as follows:
| Q4 Consensus | Change (Y-o-Y) | FY24 Consensus | Y-o-Y Change | |
| EPS | $1.56 | +6.85% | $6.62 | +8.00% |
| Revenue | $93.39B | +4.4% | $387.96B | +1.22% |
More details regarding the company’s progress with artificial intelligence technology could be forthcoming when the tech giant hosts its earnings call at 5 p.m. EDT.
Apple Stock: For the year-to-date period, Apple stock has added 13.71%, comparable with the SPDR S&P 500 ETF Trust’s SPY 14.96% gain and Invesco QQQ Trust’s QQQ 12.57% advance.
The stock ended Thursday’s session down 1.68% at $218.36.
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Apple CEO Tim Cook. Photo courtesy of Apple.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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