Apple’s AI-enhanced iPhones help tech giant’s earnings beat

Apple Inc’s artificial intelligence-enhanced iPhones have pushed its latest earnings past Wall Street’s expectations, but a muted outlook for this quarter dampened its share price after the bell.

Apple’s fourth-quarter 2024 results on Oct. 31 reported revenues hit $94.93 billion, up 6.1% from last year and just beating analyst estimates of $94.56 billion. 

Its earnings per share came in at $1.64, up from $1.46 in the year-ago quarter and 10% greater than Wall Street’s estimate of $1.49.

Its flagship iPhone saw sales bump 5.5% from a year ago to $46.22 billion, beating estimates of $45.47 billion. Its quarter ending Sept. 28 took in just eight days of sales for its latest iPhone 16 which launched Sept. 20.

The tech giant has recently injected its later-gen iPhones — and its other products like the iPad and Macs — with AI features in a bid to keep up with consumer expectations and its AI-shipping competitors.

However, the so-called “Apple Intelligence” has, so far, not lived up to the hype and only really offered the prominent feature of summarizing notifications. 

It’s currently in beta, restricted to the US English language, and is locked behind a waitlist, but Apple promises more features and languages are to come in December.

Apple’s AI is also only available on its newest range of phones — the iPhone 16 — and the Pro versions of its iPhone 15 range, which means customers who want AI on their phones would have to upgrade.

But Apple financial chief Luca Maestri said on an earnings call that it expects total revenues this quarter, ending December, “to grow low to mid-single digits year over year” — below Wall Street estimates of over 6.5% to $127.5 billion.

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Executives, including CEO Tim Cook, ducked questions on the call about how they think iPhone sales could fare this quarter, especially in China, one of Apple’s biggest markets where the AI features aren’t available, and Apple hasn’t said when they will be.

Apple (AAPL) closed down 1.82% to $225.91 on Oct. 31, continuing to fall 1.86% after hours to $221.71, per Google Finance. Its share price is, however, up around 21.7% this year.

Apple Inc shares dived after hours on a tempered outlook and slow quarterly China sales. Source: Google Finance

The tech giant reported its China region sales were $15.03 billion compared to the $16.34 billion estimated by analysts, which may have contributed to its after-market hours price slide.

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