Apple shook off challenges in Europe and China to post record sales for the fourth quarter ending September 2024.
Apple sales rose despite headwinds in its European and Chinese markets. In Europe, Apple faced the reversal of the European General Court’s State Aid decision, resulting in a significant quarter charge. Earnings per share came at $0.97 after the charge versus $1.64.
Apple has been facing a slowdown in sales in China due to several factors. One is a government directive that banned the use of iPhones in government buildings or for government work.
“Asia-Pacific again delivered the best growth,” Dave Novosel, senior analyst at Gimme Credit, told The Epoch Times via email. “Conversely, Greater China was the weak spot, with a decline of 0.3 percent. However, that was much better than the decreases in the first half of the year, which were more than 10 percent.”
Apple’s ability to overcome the European and Chinese market challenges and accelerate its sales highlights its business and investment strategy: the relentless drive to deliver superior products to its customers and enhance shareholder value in the process.
“Today, Apple is reporting a new September quarter revenue record of $94.9 billion, up 6 percent from a year ago,” Apple CEO Tim Cook said in a statement accompanying the release of fourth-quarter results. “During the quarter, we were excited to announce our best products yet, with the all-new iPhone 16 lineup, Apple Watch Series 10, AirPods 4, and remarkable hearing health and sleep apnea detection features. And this week, we released our first set of features for Apple Intelligence, which sets a new standard for privacy in AI and supercharges our lineup heading into the holiday season.”
Apple Chief Financial Officer Luca Maestri connected the dots between shareholder returns and customer satisfaction.
“Our record business performance during the September quarter drove nearly $27 billion in operating cash flow, allowing us to return over $29 billion to our shareholders,” he said. “We are very pleased that our active installed base of devices reached a new all-time high across all products and all geographic segments, thanks to our high levels of customer satisfaction and loyalty.”
Novosel was impressed by the rebound in iPhone sales.
“The 6 percent increase in revenue posted by Apple for the fiscal fourth quarter that ended Sept. 28 was encouraging enough,” he said. “Still, the more impressive figure was the 5.5 percent increase in iPhone revenue. The Services segment continued its double-digit growth pace, although it was modestly lower than the growth in the first three quarters.”
Meanwhile, Apple’s current weighted average cost of capital stands at 11.08 percent, meaning that the tech giant delivers superior market returns to its capital holders.
The trouble is that services didn’t perform as well in the third quarter, adding to Wall Street’s anxiety over European and Chinese business challenges. Thus, the decline in Apple’s shares in Friday’s session added to Thursday’s losses.
David Materazzi, CEO of Galileo FX, an automated trading platform, sees Apple’s earnings paint a clear line between strength and stagnation.
“With iPhone sales crushing expectations at $46.2 billion, Apple’s hardware base is a fortress,” he told The Epoch Times. “But the slight miss in services revenue ... that’s a crack in the illusion of endless growth. Services were supposed to be Apple’s golden goose, its answer to future-proofing … but even the mightiest oak shows rot at its roots if left unchecked.”
Materazzi says that Apple needs help to afford to coast on hardware.
“Investors, wake up: The truth is clear, and only those with eyes open will see the real path forward,” he said.
