Apple’s (NASDAQ: AAPL) latest earnings report can best be described as chaotic. The company announced strong iPhone sales figures overall but also revealed lacking demand in China and a major one-time net income hit from an E.U. tax ruling.
AAPL’s stock market performance, however, revealed that investors were mostly influenced by the report’s negative aspects. Apple shares declined 1.82% to $225.91 on Thursday, October 31, and another 1.79% to $221.86 in the extended session leading into Friday.
The good, the bad, and the ugly of the Apple report
Some of the standout figures provided by the technology giant include the $94.9 billion in revenue – and particularly the $46.2 billion from iPhone sales – but also the 35% decrease in net income due to the aforementioned decision in the European Union.
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Apple’s spot in the Chinese market also proved to be under pressure due to stiff competition from local manufacturers such as Xiaomi and Huawei. Specifically, it fell to the sixth spot among smartphone sellers in the People’s Republic despite the hopes the iPhone 16 would help bolster market share.
Still, CEO Tim Cook remained optimistic about the new product and its upcoming full integration with artificial intelligence (AI), calling the latest iPhone and Apple Intelligence the firm’s best products to date.
He simultaneously pointed out that, without the E.U. ruling, earnings-per-share (EPS) would have come in at $1.64 – better than the forecasted $1.60 – and well above the actual $0.97.
On the software front, Apple reported that the adoption of the new iOS version – 18.1 – is moving twice as fast as last year’s 17.1.
Analysts in strong disagreement with investors about AAPL shares
The first analysts to react to the fiscal fourth-quarter report appear to have taken the opposite outlook compared to investors.
Oppenheimer reiterated its ‘outperform’ rating and the $250 price target – a 10.66% upside from the latest closing price – and focused on the strong EPS, revenue, and consumer electronics product and services sales.
Oppenheimer also described strong demand in Europe and flat demand in China as signs of ‘continued sequential recovery.’
Finally, though the firm acknowledged guidance came in slightly weaker than expected and the possible headwinds from the gradual rollout and support for languages other than English, it reaffirmed its optimistic outlook for Apple Intelligence and iPhone replacement.
Though he is yet to provide a revised price target, Wedbush’s Dan Ives reacted positively to Apple’s latest report, emphasizing the strong product and service sales while pointing out they were achieved without Apple Intelligence being available in China.
However, he indicated his belief that AAPL stock will strive for new highs, as he stated at the end of an X post that there are a ‘lot of growth levers underway.’
.Featured image:
TonyV3112. Apple flag-store in Nanjing East Road at night. Digital image. SHANGHAI-JUNE 5, 2014. Shutterstock, June 12, 2014. Date retrieved: November 1, 2024.
