Apple Q3 2024 Earnings Summary - AI, and Record Sales
$Apple(AAPL.US$ recent earnings report brings some mixed news, but there's a lot to be optimistic about. Despite a drop in sales in China, they saw better-than-expected iPhone sales for Q3, a surprise on iPads’ sales surge, and it's placing a big bet on artificial intelligence to keep the momentum going.
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607846406-44512a572e.png/big?area=104&is_public=true)
Positives:
- Revenue and EPS: Revenue grew by 4.9% in Q3, and similar growth is expected in Q4. EPS were $1.40, beating Wall Street's estimate of $1.35. Q3 quarter hit a record revenue of $85.8 billion, a 5% increase y-o-y.
- iPad: Sales surged by 23.7% thanks to new AI-focused models.
- AI Focus: Apple is gearing up for a significant software upgrade, including AI features. The "Apple Intelligence" suite requires at least an iPhone 15 Pro, potentially driving more upgrades.
Negatives:
- iPhone: Sales were down by just 0.9% y-o-y compared to the 2.2% drop analysts predicted, but still can be considered an “overall success”
- Services sales: Revenue rose by 14.1% q-o-q
- China Market: While sales in China fell by 6.5%, it’s a slight improvement from the previous quarter’s 8.1% decline. Apple is combating local competition with discounts and remains optimistic despite economic challenges.
- Operating Expenses: Operating expenses increased by 7% year-over-year, reaching $14.3 billion.
Apple's AI push is a strategic move to stay ahead of competitors like Samsung, Google, and Microsoft, who have been quicker to adopt AI features. With over $100 billion invested in R&D over the past five years, Apple is serious about leading the AI race while maintaining strong profit margins.
The future success hinges on two key factors: keeping AI development costs in check and creating compelling AI-driven features that persuade users to upgrade their devices.
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607846958-ce5de01abe.png/big?area=104&is_public=true)
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607847300-54526050ca.png/big?area=104&is_public=true)
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607846810-6263d7bc3d.png/big?area=104&is_public=true)
Apple also spent $32 billion on dividends and share repurchases during the quarter, showing strong financial health and commitment to returning value to shareholders.
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607846444-ef09c20cac.png/big?area=104&is_public=true)
What do you think about Apple's AI strategy? Will it be enough to overcome the challenges in China and stay ahead of its competitors? Comment down below!
![Apple Q3 2024 Earnings Summary - AI, and Record Sales](https://sgsnsimg.moomoo.com/sns_client_feed/101775156/20240802/1722607846722-9df45153fa.png/big?area=104&is_public=true)
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nice Lemur_8480 : Hi Ziet,
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Ziet Invests OP nice Lemur_8480 : What’s nicshare?