Apple’s revenue hit a record of $143.8 billion, driven by a surge in iPhone sales in China. The company’s Q1 earnings came out yesterday, beating Wall Street estimates and driving the share price high in the aftermarket. The stock price climbed as high as $266 and then dropped to $259, where it consolidated, marking a 0.5% uptick from the last close.
Apple’s iPhone revenue also hit a record of $85.3 billion, beating the Wall Street estimate of $78.3 billion by 8.9%. Apple’s CEO highlighted the iPhone-driven revenue growth in a Reuters interview: “The demand for iPhone was simply staggering, with revenue growing 23% year over year to achieve its biggest quarter in history.”
Q1 Highlights: Apple Beats Revenue Estimates and EPS in Big Margins
Apple’s quarterly revenue of $143.8 billion (16% YoY) immediately shot up its stock price as it beat Wall Street estimates of $135-$138.4 billion by 4-5%. The estimated EPS was $2.67-$2.68, which was also beaten by large margins, as the report indicated a high earnings per share of $2.84 ( a 6-7% beat).
The smartphone giant also generated $54 billion in operating cash flow and returned $32 billion to its shareholders. The second biggest revenue generator for Apple was the service segment, which hit a revenue of $30 billion, well within the analyst estimate range. The share price went from the previous close of $258.28 to $259.69 in the after-market – a 0.5% climb.
The iPhone 17, Android Switchers, and Doubled Store Traffic in China
Apple’s latest smartphone flagship lineup played a key role in grabbing a huge market share in China. The iPhone 17 series rose against China’s local-product promotion policy, and Huawei’s competitive pricing is remarkable. Analysts attribute the iPhone’s unprecedented sales in China to the iPhone 17 buzz and increasing Android switchers.
Apple reported a double-digit growth in Android switchers in China, driven by iPhone’s privacy, build quality, and camera supremacy. The reports also indicate that visitors to Apple stores in China doubled in the past quarter. Thus, Apple was able to consistently rank in the top 3 spots in China’s urban smartphone sales.
Huawei is Apple’s major rival in China, which slowed down in its fourth quarter as shipments went down by 14%. Driven by the competitor’s slowdown, iPhone 17 buzz, and an increase in Android switchers, Apple has landed a massive revenue of $25.53 billion (up 38% YoY).
What is Next for Apple?
Similar to other tech giants, Apple is also allocating billions of dollars into the AI arena. A day before the earnings report, on January 28, Apple announced its acquisition of an Israel-based AI startup called ‘Q.ai’ for $2 billion. The startup is developing tech that detects facial micro-movements and whispered speech. The move signals the next-gen updates on Siri and Vision Pro (possibly no voice mode).
Apple guidance also indicates that the company expects a continuation of ‘staggering’ demand for iPhones. Wall Street analysts project an average upside of 15.60% for Apple’s share. The consensus on the target price is $298.57.
