Apple’s revenue beats Wall Street expectations on higher iPhone sales

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Apple reported solid revenue growth in the past quarter as the tech group offered a bullish outlook on how new artificial intelligence features would drive an uptick in hardware sales into the holiday season.

The iPhone-maker’s revenue rose 6 per cent from a year ago to $94.9bn for the quarter to September 28, slightly above consensus estimates of $94.4bn.

Diluted earnings per share were $0.97, after the company took a one-time $10.2bn tax charge in connection with an EU ruling earlier this year. Net income was $14.7bn, compared to the $24.3bn estimated by analysts absent the charge.

In September a long-running legal dispute with the EU over the company’s Irish tax affairs resulted in a victory for the regulator when the bloc’s top court ruled Apple must pay €13bn in back taxes.

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

Overall iPhone sales were $46.2bn, compared with $43.8bn the year before.

The company’s services business, which includes the App Store and Apple Pay, continued the strong growth it has seen over multiple quarters, hitting an all-time high of $24.9bn, up about 12 per cent year-on-year.

Shares of Apple, the world’s most valuable listed company, are up more than 20 per cent year to date. They were 1.3 per cent lower after the results were released.

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

On Monday Apple began the launch of its new AI features with software updates for iPhone, iPad and Mac. The first Apple Intelligence tools, initially available only in US English and limited on smartphones to the iPhone 15 and 16, included a revamped Siri voice assistant, writing aids and AI-powered photo editing tools.

Apple chief financial officer Luca Maestri told the Financial Times that sales of the iPhone 16 — the latest model of its flagship smartphone that shipped on September 20 — had been “higher than iPhone 15 sales” during its first eight days of sales in 2023.

Customers were proving receptive to new generative AI features, Maestri said, downloading the new AI-focused operating system at twice the speed that they were for last year’s software update.

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

Apple’s staggered approach to releasing the features has raised questions about whether any anticipated AI-driven boost to sales will happen in time for the current quarter, which includes its busy holiday period.

Maestri is stepping down as chief financial officer at the start of 2025, with Kevan Parekh, Apple’s vice-president for financial planning and analysis, taking over the role.