Apple posts strong profit on iPhone sales, China lags

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Apple disclosed better-than-expected financial results for the fourth quarter of 2023, but iPhone sales contracted in China, one of its key markets.

The company's Q4 net income reached $33.92 billion, a 13% year-on-year (YoY) increase, with earnings per share (EPS) of $2.18 compared to Refinitiv's forecast of $2.10.

Sales grew by 2% on a yearly basis to $119.58 billion after four consecutive quarters of decline, beating expectations of $117.91 billion. The overall profit margin continued to rise.

iPhone revenues amounted to $69.7 billion, topping forecasts of $67.82 billion. Mac computer revenues reached $7.78 billion, slightly above the expected $7.73 billion.

iPad devices generated $7.02 billion in revenues, falling short of expectations set at $7.33 billion, while other products brought in $11.95 billion compared to the forecast $11.56 billion.

Service revenues reached $23.12 billion, slightly below expectations of $23.35 billion. The gross profit margin was 45.9%, exceeding analysts' expectations of 45.3%.

iPhone sales increased by 6%, a positive signal for the iPhone 15, which was released in September. The service business grew by 11%, although it fell short of expectations. Investors closely monitor Apple's service business as a future growth driver.

Apple stated that it now has 2.2 billion active devices, a metric analysts use to estimate Apple's service growth, which is higher than the two billion active devices at the same time last year.

The company's stock fell by 1.60% in after the bell to $183.90, at 00:50 KSA time, after ending Thursday's session with a 1.35% rise.

Sales showed growth in all regions except China, where it declined by around 13%, raising concerns about a decline in demand for the company's products in its third-largest market.