Apple (AAPL) reported its fiscal first quarter earnings after the bell on Thursday, beating expectations on the top and bottom lines but falling short on iPhone revenue. Sales out of the company’s Greater China region were also lower than Wall Street anticipated in the quarter.
The report comes after Jefferies and Loop Capital downgraded Apple’s stock last week on fears of sluggish iPhone sales. Oppenheimer also downgraded shares on Wednesday, citing slower iPhone growth.
For the quarter, Apple reported earnings per share of $2.40 on revenue of $124.3 billion. Analysts were looking for EPS of $2.35 and revenue of $124.1 billion, according to Bloomberg consensus estimates.
Apple’s iPhone segment brought in $69.1 billion versus expectations of $71 billion, down slightly from the $69.7 billion the company reported for the segment in the last year. The company’s Services business generated $26.3 billion in revenue, in line with Wall Street’s expectations. Greater China sales topped out at $18.5 billion. Wall Street was expecting $21.5 billion.
China has been a persistent area of trouble for Apple over the last two years. Sales in the region declined 8% in 2024, falling to $66.9 billion, and 2% in 2023. At the time, Apple blamed weakness in the renminbi versus the dollar and lower iPhone and iPad sales.
According to estimates by IDC and Canalys, overall iPhone market share fell 1% year over year in Q4 to 23% despite the broader market for smartphone shipments increasing by 3%. Apple kicked off its big AI push in October, releasing the first raft of its Apple Intelligence updates.
The software is meant to serve as a key feature to entice consumers to upgrade to the company’s latest and greatest smartphones, the iPhone 16 line, but analysts worry it’s not the catalyst Wall Street initially hoped it would be.
Apple will continue to release Apple Intelligence updates throughout the year, enhancing its capabilities with more useful functions, including the ability to gather information across multiple apps from a single interface.
Apple is also set to release a slew of new products in the coming months, including a new entry-level iPhone SE, as well as new iPads and MacBook Airs, according to Bloomberg’s Mark Gurman.
Shares of Apple are up 24% over the last 12 months, about the same as Google (GOOG, GOOGL), which is up 27%. Nvidia (NVDA), meanwhile, is up 102%, despite a rout on Monday driven by fears that China’s DeepSeek AI platform has upended the need for high-powered AI chips.
Meta (META) is up 69%, while Microsoft (MSFT) has proven to be one of Big Tech’s biggest laggards, rising just 8% over the last year.
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