Apple announces that iPhone revenue set a record
There is no more wondering about whether the public loves the iPhone 15 series. Apple reported its fiscal fourth-quarter earnings today which includes the September release of the latest iPhone models as revenue for the smartphone set an all-time record for the quarter which includes the launch of many earlier iPhone lines. For the three months, Apple took in $43.81 billion in iPhone revenue which is up 2.8% from the $42.36 billion in revenue generated by the iPhone during the same quarter last year.
For the 2023 fiscal year the iPhone took in $200.58 billion in gross which was a 2.4% decline from the $205.49 billion that the smartphone generated in sales during fiscal 2022. Apple said that it expects overall revenue to be flat year-over-year during the fiscal first quarter of 2024 which includes the holiday shopping season and this led to the sell off in the shares following the release of the report (more on that below).
Apple's second-largest business segment set a new all-time record for quarterly revenue
Apple's second-largest segment set an all-time record for revenue. Services grossed $22.31 billion during the fiscal fourth quarter, a fine 16.3% increase. For fiscal 2023, Services brought in $85.20 billion, 9% higher than the $78.13 billion that the unit took in during fiscal 2022. It wasn't so long ago that Apple had set a goal to achieve $50 billion in annual sales for the Services unit.
The App Store is part of the record-breaking Services unit
Sales of the iPad tablet series declined 10.2% from $7.17 billion during the fiscal fourth quarter of 2022 to $6.44 billion during the fiscal fourth quarter of this year. Annual gross for the iPad during fiscal 2023 amounted to $28.30 billion, off 3.4% from fiscal 2022's $29.29 billion. The end of the pandemic has reduced demand for tablets such as the iPad with many adults no longer working from home, and kids heading back to school. During the peak of the COVID scare, many depended on the device for work and play.
The Wearables, Home and Accessories division includes two of Apple's most popular products in the Apple Watch and the AirPods. That division took in $9.32 billion in revenue during the fiscal fourth quarter of this year which was 3.4% lower than the $9.65 billion that the unit grossed during the same quarter last year. Full-year revenue for this segment was $39.85 billion which was down 3.4% from the $41.24 billion that was reported for the 2022 fiscal year.
During the July-September period, sales in the Americas rose slightly to $40.12 billion from $39.81 billion last year. Sales declined year-over-year in all other regions including Europe, Greater China, Japan, and the Rest of Asia Pacific. The only region that had higher revenue for the entire fiscal year was the latter with a small gain from last year's $29.38 billion to this year's $29.62 billion.
Apple CEO Tim Cook said, "Today Apple is pleased to report a September quarter revenue record for iPhone and an all-time revenue record in Services. We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon neutral Apple Watch models, a major milestone in our efforts to make all Apple products carbon neutral by 2030."
Overall revenue for the quarter was $89.50 billion, down from the $90.15 billion in revenue that Apple reported last year. For all of fiscal 2023, Apple's top-line number was down 2.8% at $383.29 billion compared to the $394.33 billion reported for fiscal 2022. Net income for the fiscal fourth quarter of 2023 came in at $22.96 billion ($1.47 per share) which was a nice 10.8% increase from last year's $20.72 billion ($1.29 per share). Net income for all of fiscal 2023 amounted to $97 billion ($6.16 per share) compared to the $99.80 billion ($6.15) in net Apple had for fiscal 2022.
The report led sellers to dump Apple's shares in after-hours trading
If you're wondering how Apple could have lower net income for fiscal year 2023 but show a higher earnings per share figure, the answer is that the company had fewer shares outstanding this year thanks to share buybacks.
Luca Maestri, Apple’s CFO, stated, "Our active installed base of devices has again reached a new all-time high across all products and all geographic segments, thanks to the strength of our ecosystem and unparalleled customer loyalty. During the September quarter, our business performance drove double-digit EPS growth and we returned nearly $25 billion to our shareholders, while continuing to invest in our long-term growth plans."
Despite the strong numbers generated by the iPhone and the Services unit, Apple's shares have declined in after-hours trading following the release of the report. After rising $3.60 or 2.07% today to $177.57 during regular trading, Apple's shares plunged $6.22 or 3.50% to $171.35 in after-hours trading.
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