In premarket U.S. trade, Apple (NASDAQ:AAPL) shares were up after initially
declining after the iPhone manufacturer's most recent quarterly reports.
According to corporate executives, the firm now anticipates low- to
mid-single-digit growth in sales for its fiscal second quarter. According to
analysts cited by Reuters, the guidance exceeded expectations and indicated
momentum in demand for the iPhone.
The more optimistic prognosis helped allay some concerns regarding sales of
Apple's flagship phone, which fell slightly and fell short of forecasts during
its crucial holiday shopping period, partly because the company's new AI
features were unavailable in some areas. Nevertheless, CEO Tim Cook said that
the improvements, dubbed Apple Intelligence, are increasing sales.
Compared to its Silicon Valley competitors, Apple has adopted a more cautious
stance toward AI by deciding against making significant investments in data
center expansion. During the market turbulence earlier this week, which was
sparked by DeepSeek and caused sharp declines in other Big Tech equities, the
technique appeared to help shield the company.
Apple announced earnings of $2.42 per share on revenue of $124.3 billion for
the three months ending December 28. Investing.com polled analysts, who
projected an EPS of $2.36 on $124.12 billion in revenue.
Sales of iPhones, which make up about half of total income, dropped from $69.70
billion to $69.14 billion in the previous year, falling short of projections of
$71.03 billion.
In contrast to Wall Street projections of $26.09 billion, Apple's services
division, which includes its Apple Pay and App Store offerings, grew by around
14% year over year to $26.34 billion.
Apple's sales in Greater China fell 11% to $18.5 billion, far less than analyst
estimates of $21.57 billion, in the latest indication that the competition in
China's smartphone market is still fierce.
Apple's first-quarter results were described as "mixed" by analysts
at DA Davidson, lead by Gil Luria, in a letter to clients, with "positive
notes in various segments [being] slightly overshadowed by some negatives,
primarily out of Greater China."
Nevertheless, it is evident that Apple Intelligence is helping the iPhone
expand in the areas and nations where it is sold. Apple Intelligence will soon
be available in new regions, along with new capabilities for current customers,
even if its rollout is still taking longer than expected, Luria said.
(Reports were contributed by Yasin Ebrahim.)
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