Apple (AAPL) earnings report Q3 2024

Apple reported fiscal third-quarter earnings on Thursday that beat Wall Street expectations, with overall revenue rising 5%.  

Apple shares fell 1% in extended trading.

Here’s how Apple did versus LSEG consensus estimates for the quarter ended June 29: 

• EPS: $1.40 vs. $1.35 estimated 
• Revenue: $85.78 billion vs. $84.53 billion estimated 
• iPhone revenue: $39.30 billion vs. $38.81 billion estimated 
• Mac revenue: $7.01 billion vs. $7.02 billion estimated 
• iPad revenue: $7.16 billion vs. $6.61 billion estimated 
• Wearables, Home, and Accessories revenue: $8.10 billion vs. $7.79 billion estimated 
• Services revenue: $24.21 billion vs. $24.01 billion estimated 
• Gross margin: 46.3% vs. 46.1% estimated 

Apple expects about similar overall revenue growth in the current quarter as the June quarter, which was 5%, Apple CFO Luca Maestri said on a call with analysts.

Apple also expects Services to grow at about the same rate as the previous three quarters, which was about 14%. Apple expects September quarter operating expenditures between $14.2 and $14.4 billion, Maestri added. Apple said it expected September quarter gross margin to be between 45.5% and 46.5%.

Apple reported $21.45 billion in net income during the quarter, versus $19.88 billion, or $1.26 per share,  in the year-ago period.  

Apple’s most important business remains the iPhone, which accounted for about 46% of the company’s total sales during the quarter. While Apple beat LSEG estimates, the product line still declined about 1% on an annual basis to $39.29 billion in revenue.  

“On a constant currency basis, we grew year on year. And so that’s sort of how we look at it from an operational point of view,” Apple CEO Tim Cook told CNBC’s Steve Kovach.  

Cook said that while Apple doesn’t know about the positive sales impact from its newly announced Apple Intelligence service until it starts shipping to customers later this fall, he said that Apple had been increasing spending to get the service ready.  

“What we’ve done is we’ve redeployed a lot of people on to AI that were working on other things,” Cook said. “From a data center point of view, as you know, we have a hybrid approach. So we both have our own and we partner with people. And so that capex would be in the partners’ financials, and we would be paying expense.” 

“Certainly embedded in our results this quarter is an increase year over year in the amount we’re spending for AI and Apple intelligence,” Cook continued.  

Apple showed strongest growth in its iPad division, which grew nearly 24% year-over-year to $7.16 billion in sales. Apple released new iPads during the quarter for the first time since 2022, which spurred a wave of upgrades. 

Cook said that about half of iPad buyers haven’t owned one before, suggesting the tablet market is not yet saturated. 

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