Apple returns to growth path despite decline in sales in China. economy

The apple is growing again. After declining sales and declining profits in the 2022-2023 fiscal year, the company founded by Steve Jobs and directed by Tim Cook is back on the path to growth despite a decline in sales at the start of the 2023-2024 fiscal year. China. Apple reported revenues of $119,575 million (about 110,000 million euros) in the first quarter of its new fiscal year (between October and December), 2% more than the same period last year. The company’s profit increased by 13% to $33,916 million.

Last year went from low to high, but it always went into negative territory. Sales fell 5% year-on-year in the Christmas quarter, the worst the business has seen. Then the second resulted in a 3% year-over-year loss, which was more than analysts had forecast. And the decline in the third was 1.4%, supported by a recovery in demand in China. Sales declined only 0.7% in the fourth quarter. Now, they are moving upward in the first quarter of the new year, although without recovering Christmas 2021 levels.

This growth comes due to the iPhone, which has strongly improved its sales (6%, 69,706 million dollars), and despite the burden of China, where the American giant’s business is in decline. Sales in that country fell 13% year-over-year to $20,819 million in the quarter, the lowest level in several years. “We are not happy with the decline, but we know China is the most competitive market in the world,” Chief Financial Officer Luca Maestri said in an interview with Bloomberg Television. Huawei has launched new high-end models with which it is gaining share from the Cupertino (California) firm.

Apple also faces growing government hostility toward cooling consumption and foreign technology in China, including a veto for its use in some government departments. China still represents 17% of Apple’s sales, which outpaced all other markets. Billings in the United States increased 2.3%, to 50,430 million; Europe by 9.8%, to 30,397 million; 15% in Japan, to 7,767 million, and 6.6% in the rest of Asia-Pacific, to 10,162 million.

Concerns about business growth in China overshadowed the results, which, overall, exceeded forecasts in both revenues and profits. Apple shares fell nearly 3% on the stock market outside normal trading hours this Thursday after the accounts were disclosed.

iPhone Engine

Device-wise, the iPhone is the sole development engine. Mac sales improved a minimal 0.6%, reaching 7,780 million, but at least they no longer represent the burden they were in recent quarters. The iPad fared the worst, falling 25% to 7,023 million. And the accessories, home and other devices sector, which includes the Apple Watch and AirPods, also declined 11%.

What’s really growing the most, even above the iPhone in relative terms, is billings for services, which grew 11% to 23,117 million. However, this segment is subject to regulatory and competitive pressure, both due to app stores and lucrative agreements giving Google the status of default search engine on its devices.

The company is focusing on the launch of its Vision Pro virtual reality glasses, which will go on sale this Friday in the United States for a price of $3,499 plus tax. To that amount we have to add a case, extra battery and other accessories for a better experience. It’s a risky bet for a company that has developed hundreds of applications for the new gadget.

“Apple today announced December quarter revenue growth driven by iPhone sales and all-time record revenue in Services,” Apple CEO Tim Cook said in a statement. “We are pleased to announce that our installed base of active devices now exceeds 2.2 billion, reaching an all-time high across all products and geographies. And as customers begin to experience the incredible Apple Vision Pro tomorrow, we are more committed than ever to pursuing breakthrough innovations consistent with our values ​​and on behalf of our customers.

“Our December quarter performance coupled with margin expansion delivered all-time record earnings per share of $2.18, up 16% from last year,” said Chief Financial Officer Luca Maestri. “During the quarter, we generated approximately $40 billion of operating cash flow and returned approximately $27 billion to our shareholders. “We are confident about our future and will continue to make significant investments in our business to support our long-term growth plans,” he said.

Apple’s board of directors approved a cash dividend of $0.24 per share, payable on February 15 to shareholders of record as of the close of business on February 12.

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