Apple (AAPL) Beats Q3 Earnings Estimates, Revenues Up Y/Y

Apple AAPL reported third-quarter fiscal 2024 earnings of $1.40 per share, which beat the Zacks Consensus Estimate by 4.48% and increased 11.1% year over year. Net sales increased 4.9% year over year to $85.78 billion and beat the Zacks Consensus Estimate by 1.59%. Unfavorable forex hurt net sales by 230 basis points (bps).iPhone Sales Decline Offset by Services GrowthiPhone sales decreased 0.9% from the year-ago quarter to $39.27 billion and accounted for 45.8% of total sales. iPhone sales beat the Zacks Consensus Estimate by 1.43%. Overall, product sales (71.8% of sales) climbed 1.6% year over year to $61.56 billion. Services revenues grew 14.1% from the year-ago quarter to $24.21 billion and accounted for 28.2% of sales. The figure beat the consensus mark by 0.89%.Apple Inc. Price, Consensus and EPS Surprise Apple Inc. price-consensus-eps-surprise-chart | Apple Inc. QuoteApple now has more than 1 billion paid subscribers across its Services portfolio, more than double what it had four years ago. Paid subscriptions grew double-digits year over year in the reported quarter.Geographic DetailsAmerica’s sales increased 6.5% year over year to $37.68 billion and accounted for 43.9% of total sales. The figure beat the Zacks Consensus Estimate by 3.53%.Europe generated $21.88 billion in sales, up 8.3% on a year-over-year basis. The region accounted for 25.5% of total sales. Europe’s sales beat the consensus mark by 6%.Greater China sales decreased 6.5% from the year-ago quarter to $14.73 billion, accounting for 17.2% of total sales. The figure lagged the Zacks Consensus Estimate by 3.03%.Rest of the Asia Pacific generated sales of $6.39 billion, up 13.5% year over year. The region accounted for 7.4% of total sales. The figure beat the consensus mark by 4.66%.Japan’s sales of $5.1 billion increased 5.7% year over year, accounting for 6.9% of total sales. The figure beat the consensus mark by 3.11%.Mac & iPad Sales Up, Wearables DeclineNon-iPhone revenues (iPad, Mac and Wearables) increased 6.5% year over year on a combined basis.Mac sales of $7 billion increased 2.5% from the year-ago quarter and accounted for 8.2% of total sales. The figure beat the Zacks Consensus Estimate by 1.24%. iPad sales of $7.16 billion increased 23.7% year over year and accounted for 8.3% of total sales. The figure beat the Zacks Consensus Estimate by 4.05%. Wearables, Home and Accessories sales decreased 2.3% year over year to $8.1 billion and accounted for 9.4% of total sales. The figure beat the consensus mark by 7.77%.Operating DetailsGross margin of 46.3% expanded 170 bps on a year-over-year basis. The gross margin contracted 30 bps sequentially due to an unfavorable product mix.Products’ gross margin contracted 130 bps sequentially to 35.3%. Services’ gross margin was 74%, down 60 bps sequentially.Operating expenses rose 6.8% year over year to $14.33 billion due to higher research & development expenses, which increased 7.6% year over year. Selling, general & administrative expenses increased 5.8% year over year. As a percentage of revenues, research & development expenses, as well as selling, general & administrative expenses, increased 20 bps and 10 bps, respectively.Operating margin expanded 140 bps on a year-over-year basis to 29.6%.Balance SheetAs of Jun 29, 2024, cash & marketable securities were $153.04 billion compared with $162.34 billion as of Mar 30, 2024.Term debt, as of Jun 29, 2024, was $98.31 billion, down from $102.59 billion as of Mar 30, 2024.Apple returned nearly $32 billion in the reported quarter through dividend payouts ($3.9 billion) and share repurchases ($26 billion).GuidanceApple expects the September quarter’s (fourth-quarter fiscal 2024) revenues to grow at the same rate as of June quarter on a year-over-year basis. Unfavorable forex is expected to hurt revenues by 1.5%. For the Services segment, Apple expects a double-digit growth rate similar to the first three quarters of fiscal 2024.Gross margin is expected to be 45.5-46.5% in the fourth quarter of fiscal 2024. Operating expenses are expected to be between $14.2 billion and $14.4 billion.Zacks Rank & Stocks to ConsiderApple currently carries a Zacks Rank #3 (Hold).Year to date, AAPL shares have returned 13.4% compared with the Zacks Computer and Technology sector’s rise of 17.2%.Shopify SHOP, CACI International CACI and Dell Technologies DELL are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shopify shares have declined 25.4% year to date. SHOP is set to report second-quarter 2024 results on Aug 7.CACI International shares have gained 43.2% year to date. CACI is set to report fourth-quarter fiscal 2024 results on Aug 8.Dell Technologies shares have gained 41.7% year to date. DELL is set to report second-quarter fiscal 2025 results on Aug 29.Research Chief Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Dell Technologies Inc. (DELL): Free Stock Analysis Report CACI International, Inc. (CACI): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks