Apple CEO Tim Cook dinner
Apple’s third-quarter monetary outcomes had been a big enchancment for 2024. Here is how the figures visually break down in 1 / 4 the place Apple soundly beat Wall Road’s forecasts.
Forward of the quarterly outcomes for the third quarter of 2024, Wall Road had predictions that Apple would do higher than final 12 months. Nonetheless, the fact was that Apple soundly beat the forecasts in lots of areas.
That is the breakdown of Apple’s figures for the interval in comparison with earlier quarters, offering a fuller image of Apple’s monetary journey.
Apple’s predominant monetary figures for Q3 2024
The headline quantity for Apple is its income, which hit $85.78 billion for the quarter. That is up from the $81.8 billion reported one 12 months prior, representing an increase of 4.9%.
Apple quarterly income and web revenue
The online revenue can also be as much as $21.4 billion, which is an increase of seven.9% over Q3 2023’s numbers.
The year-on-year change in Apple income and web revenue
The gross margin of $39.7 billion is a sound 9% larger than the determine from Q3 2023.
Apple quarterly income versus gross margin
At 46.26, the gross margin is the next share of income than the 44.52% seen one 12 months prior. It has been above 40% since Q2 2021.
Yr-on-year change in income and gross margin
Apple’s analysis and improvement spending is a phenomenally excessive worth for any firm, and it would not appear that Apple might be altering its habits anytime quickly.
Apple’s quarterly analysis and improvement value
For Q3 2024, Apple spent over $8 billion on R&D. This worth has gone up 7.6% because the identical quarter in 2023, indicating a rise in spending for the interval.
Yr-on-year change in Apple’s R&D prices
Apple’s per-unit income and earnings
These first two graphs present Apple’s particular person unit income, to extra immediately evaluate them towards one another.
Apple’s quarterly income by unit
This primary one displaying the income immediately additionally exhibits that iPhone has been the primary income generator for Apple over a few years. Nonetheless, that dominance is slowly beginning to dissipate.
Apple’s unit income, by share
When checked out by how a lot income every unit brings in, we are able to see that the blue iPhone part continues to be main. Additionally, that orange Companies aspect is progressively changing into a juggernaut in its personal proper.
iPhone quarterly income
Income from iPhone was marginally down from Q3 2023, going from $39.67 then to $39.3 billion now. Even so, that is nonetheless higher than the $38.81 Wall Road forecasted.
iPhone quarterly income change year-on-year
On a share foundation, that is a negligible 0.9% year-on-year shrink in iPhone income. Given Q3 is the seasonally quietest quarter, it is not one thing Apple will actually fear about an excessive amount of.
iPad quarterly income
iPad income has loved a rebound, going from $5.79 billion in Q3 2023 to $7.16 billion. That 23.7% year-on-year enhance soundly beat Wall Road’s forecast of $6.61 billion.
Mac quarterly income
Mac additionally noticed an enchancment from $6.84 billion within the year-ago quarter to $7.01 billion now. That is a 2.5% enhance, which is not a lot, however nonetheless marginally underneath Wall Road’s prediction of $7.02 billion.
Companies quarterly income
The ever-reliable Companies enterprise continued to show its flywheel, rising from $21.21 billion in Q3 2023 to $24.2 billion. That represents a 14.1% year-on-year enhance, and in addition one other beat of Wall Road’s $24.01 billion guess.
Quarterly income for Wearables, House, and Equipment
Wearables, House, and Equipment, masking a number of product classes, noticed a small dip from $8.28 billion final 12 months to $8.09 billion this quarter. That works out to be a 2.3% drop.
Apple’s working phase income
Apple’s Working Section income
On a regional foundation, The Americas brings in essentially the most income at $37.6 billion, a 6.5% year-on-year rise. Europe’s $21.9 billion is an 8.3% acquire.
Japan managed $5.09 billion, a 5.7% year-on-year enhance, whereas Remainder of Asia Pacific hauled in $6.4 billion, up 13.5%.
Apple income from Better China
China is the outlier of the group, being the one one to see a year-on-year shrink in income. Whereas Apple managed $15.75 billion within the year-ago quarter, China’s income has dipped right down to $14.7 billion, down 6.5%.
What the analysts say
As you’d count on, the opinions on the earnings are in every single place. Most are bullish, with nonetheless some concern about iPhone gross sales.
The outcomes had been “broadly in line” for TD Cowen, however the December quarter “could be the early read on AI-driven upgrades leading to a strong iPhone cycle in CY25.” It views “broadly stable iPhone and wearables trends coupled with iPad and Mac growth as encouraging”
“Despite the macro and China weakness, demand for iPhone and other hardware products remains stable,” the notice concludes. “Services momentum is a positive and underpins FCF growth. Next iPhone launch event in Sep could be a catalyst.”
TD Cowen’s worth goal for Apple is $250.
Piper Sandler says Apple’s outcomes had been forward of expectations “largely on the back of strong growth in iPad and services.” China’s income “showed further signs of improvement” for the iPhone maker.
Whereas noting administration as being “very excited” about Apple Intelligence, the analysts are involved about it rolling out in phases globally, and it is usually “cautious about the consumer entering the second half.”
It reiterates a Impartial score and a $225 worth goal.
Gene Munster of Deepwater calls it a “solid quarter” for Apple in a YouTube video, one which insists traders are eager to understand how AI will affect the following quarter. To Munster, iPhone, iPad, and Mac might be “accelerating revenue growth.”
In idea, Munster believes this might be round 5% development for the items in This autumn, rising to six% and seven% over time, and probably to eight% in the course of the 2025 fiscal 12 months. Apple’s steerage for the following quarter was “effectively in line” with Wall Road expectations, however Munster cautions it is within the face of a “stronger than typical Osborne effect.”
Whereas Munster muses that Apple’s steerage normally softens earlier than a significant launch, Apple did not try this this time round. The analyst believes this speaks to Apple pondering the iPhone is a necessity and an indication of the power of the product line.
In J.P.Morgan’s overview of the outcomes, it discusses how Apple’s outcomes and execution “stood out in its non-eventful nature” with most product classes beating consensus expectations. This “is exactly what is desired as we look forward to the AI upgrade cycle.”
With Apple planning a roll-out of Apple Intelligence to English-speaking areas first then a wider launch, J.P.Morgan warns it “would continue to monitor for timing of the releases, which has the potential of shifting the timing of the volume upgrade.” Specifically, it thinks the upper ranges of improve will happen when Apple Intelligence is accessible in additional areas.
“In some sense, the magnitude of AI-led opportunity will likely be broader for Apple even relative to the 5G cycle given that the upgrade cycle opportunity extends across all devices.”
J.P.Morgan has a worth goal of $265.
Morgan Stanley’s view is that the outcomes will “do little to shift the investor narrative” of an “Apple Intelligence-driven, multi-year product refresh cycle thesis.” The outcomes “largely played out as expected.”
There aren’t many catalysts on the horizon till the iPhone 16 launch and the rollout of iOS 18 with Apple Intelligence, adopted by pre-order and sell-through information in early October. Besides, Morgan Stanley feels institutional managers nonetheless view Apple as “underweight” resulting in a perception Apple will “continue to outperform.”
Morgan Stanley has a worth goal for Apple of $273.