Apple's revenue beats Wall Street expectations due to higher iPhone sales

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Apple reported solid revenue growth last quarter as the tech giant offered an optimistic outlook on how new artificial intelligence features would lead to a surge in hardware sales heading into the holiday season.

The iPhone maker's revenue rose 6 percent year-on-year to $94.9 billion in the quarter ended Sept. 28, slightly above consensus estimates of $94.4 billion.

Diluted earnings per share were $0.97 after the company suffered a one-time tax charge of $10.2 billion related to an EU ruling earlier this year. Net income was $14.7 billion, compared with $24.3 billion estimated by analysts excluding this charge.

In September, a long-running legal battle with the EU over the company's Irish tax affairs led to a victory for the regulator when the bloc's top court ruled that Apple must pay 13 billion euros in back taxes.

Apple said its earnings per share, excluding the fee, were $1.64, above consensus estimates of $1.60.

Total iPhone sales were $46.2 billion, compared to $43.8 billion a year earlier.

The company's services business, which includes the App Store and Apple Pay, continued the strong growth it has seen over multiple quarters, reaching an all-time high of $24.9 billion, up about 12 percent corresponds to the previous year.

Shares of Apple, the world's most valuable listed company, have risen more than 20 percent since the beginning of the year. They fell by 1.3 percent after the results were published.

China sales were flat year-over-year at about $15 billion, an improvement from declines in the previous two quarters of 2024.

On Monday, Apple began rolling out its new AI features with software updates for iPhone, iPad and Mac. Initially only available in US English and limited to smartphones up to the iPhone 15 and 16, Apple's first intelligence tools included a revamped Siri voice assistant, writing aids and AI-powered photo editing tools.

Luca Maestri, Apple's chief financial officer, told the Financial Times that sales of the iPhone 16 – the latest model of its flagship smartphone, which shipped on September 20 – were “higher than the iPhone 15” in the first eight days of sales in 2023. “Sales” were.

Customers have been receptive to new generative AI features, Maestri said, downloading the new AI-focused operating system at twice the rate of last year's software update.

Additional AI features, such as Siri integration with ChatGPT and AI-powered emoji and image generation, are currently being tested and are expected to launch before the end of the year.

Apple's staggered approach to feature releases has raised questions about whether the expected AI-driven revenue boost will arrive in time for the current quarter, which includes the busy holiday season.

Maestri will step down as chief financial officer in early 2025, with Kevan Parekh, Apple's vice president of financial planning and analysis, taking over the role.