Apple Inc. (AAPL, Financial) released its fourth-quarter earnings report, surpassing Wall Street expectations for both revenue and earnings per share. However, a significant one-time tax expense in Europe led to a substantial drop in net profit, causing Apple's stock to fall 2% in extended trading.
Comparing the company's performance to LSEG forecasts, Apple reported adjusted earnings per share of $1.64, beating the expected $1.60. The revenue came in at $94.93 billion, higher than the anticipated $94.58 billion. iPhone revenue reached $46.22 billion, surpassing the forecast of $45.47 billion. In contrast, Mac and iPad revenues slightly missed expectations at $7.74 billion and $6.95 billion, respectively. Other products revenue was $9.04 billion, below the forecast of $9.21 billion, and services revenue stood at $24.97 billion, under the predicted $25.28 billion. The gross margin was 46.2%, slightly above the expected 46.0%.
This quarter, Apple incurred a $10.2 billion one-time tax expense related to a longstanding case dating back to 2016, concerning its tax practices in Ireland. Apple’s net income for the quarter was $14.73 billion, or $0.97 per share, compared to $22.96 billion, or $1.47 per share, a year earlier. Excluding the one-time tax fee, Apple's adjusted earnings per share increased by 12% year-over-year.
For the full fiscal year, Apple reported sales of $391.04 billion, marking a 2% increase from 2023. Revenue for the September quarter grew by 6%. The company's cash reserves currently stand at $156.65 billion. iPhone revenue grew by 6%, indicating strong market performance for the iPhone 16, which was launched on September 20, providing about a week of new product sales during the quarter. The iPhone remains Apple's most significant product, contributing nearly 49% of the company's total sales.
CEO Tim Cook noted that iPhone 15 sales were stronger than those of its predecessor and expressed optimism about Apple's AI system, Apple Smart, which began rolling out as part of the iOS 18.1 update. Cook noted the adoption rate of iOS 18.1 was twice that of iOS 17.1 in the same period last year.
Among Apple's hardware lines, iPad sales showed the strongest growth, increasing by 8% to $6.95 billion. This growth was partly due to pent-up demand after a year without new iPad releases until new iPad Pro and Air models were launched in May.
The Mac business saw a 2% revenue increase to $7.74 billion, boosted by sales of the updated MacBook Air. Apple's services division, including iCloud, Google search income, and AppleCare, remains a strong segment with a 12% annual growth to nearly $25 billion, though slightly below LSEG expectations.
The "Other Products" category, which includes AirPods, Homepod, and Apple Watch, reported $9.04 billion in revenue, down 3% year-over-year, despite new releases during the quarter. Apple spent $29 billion on stock buybacks and dividends this quarter.
