Apple Posts Surprise Quarterly Results, But Services Miss Expectations

Apple reported better-than-expected results for its fiscal Q2 2024 (January–March) on May 1 (local time), though its key growth engine services fell slightly short of market expectations.

The company announced after the market closed that it posted revenue of $95.4 billion and earnings per share (EPS) of $1.65. This slightly exceeded the consensus estimates compiled by LSEG, which anticipated $94.66 billion in revenue and EPS of $1.63.

Sales of major hardware products such as the iPhone ($46.84 billion), Mac ($7.95 billion), and iPad ($6.4 billion) all topped market expectations.

However, revenue from services came in at $26.65 billion, slightly below StreetAccount’s forecast of $26.77 billion.

In an interview with CNBC, Apple CEO Tim Cook said the impact of U.S. tariffs on China has been limited thanks to supply chain optimization, but warned that tariff-related uncertainty is increasing, making the outlook beyond June difficult to predict. He also noted that Q3 costs are expected to rise by $900 million.

Apple projected its revenue for the April–June quarter would grow in the “low to mid-single digits” year over year. The company reported $85.78 billion in revenue for the same period last year, while analysts are expecting $89.45 billion in revenue and EPS of $1.48 for this year’s third quarter.

Cook added that about half of the iPhones sold in the U.S. are now sourced from India, while most Macs, iPads, AirPods, and Apple Watches are imported from Vietnam.

Meanwhile, Apple approved a new share repurchase program of up to $100 billiondown from $110 billion last year and raised its quarterly dividend by 4% to $0.26 per share.

Following the earnings announcement, Apple shares fell more than 4% in after-hours trading.