EPS of $2.18 increased by 15.9% from previous year
Gross margin of 45.9%
Net income of 33.92B
""We achieved revenue records across more than two dozen countries and regions including all-time records in Europe and rest of Asia-Pacific." - Tim Cook" - Tim Cook
In the first quarter of FY2024, Apple Inc (AAPL) reported revenue of $119.6 billion, demonstrating a modest 2% year-over-year growth despite one less week in the quarter compared to last year. Earnings per share (EPS) reached an all-time record of $2.18, marking a significant year-over-year increase of 16%. This growth continues to be driven primarily by strong performance across the iPhone and Services segments, which achieved best-ever revenue records. The launch of new products, particularly the iPhone 15 and the anticipated Apple Vision Pro, have set the stage for sustained growth. However, challenges in specific markets, such as China, and the recent softening of macroeconomic conditions highlight areas of concern for investors.
### Key Insights from Management
- Tim Cook on Growth Areas: Apple continues to experience growth with revenue records across more than two dozen countries, including notable performance in emerging markets like India and Indonesia. Cook emphasized strong customer satisfaction with the iPhone 15, stating, "Customers are loving their new iPhone 15 family, with a customer satisfaction level of 99% in the U.S."
- Luca Maestri on Services Performance: Services revenue reached an all-time record of $23.1 billion, which represents a significant growth trajectory. Maestri mentioned, "Our installed base is now over 2.2 billion active devices and continues to grow nicely, establishing a solid foundation for the future expansion of our Services business."
- Outlook on Mac and iPad: Maestri noted, "Mac revenue generated $7.8 billion and returned to growth despite one less week of sales. iPad revenue was down due to tough comparisons but still maintains a high satisfaction rate among users."
"We achieved revenue records across more than two dozen countries and regions including all-time records in Europe and rest of Asia-Pacific." - Tim Cook
— Tim Cook
"Apple continues to see strong performance across our emerging markets with double-digit growth in the majority of the emerging markets we track." - Luca Maestri
— Luca Maestri
Forward Guidance
Looking ahead, Apple maintains an optimistic outlook, with management anticipating that Services will continue its double-digit growth trajectory in the coming quarters. Maestri guided gross margins in the range of 46% to 47%, attributing the stability to favorable product mix and operational leverage. The upcoming product launches, particularly the Apple Vision Pro, are expected to enhance market penetration and engagement. Cook remarked, "We're looking forward to tomorrow because this has been multiple years of efforts from so many people across Apple."
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
AAPL Focus
45.87%
33.80%
45.80%
22.01%
LPL
2.86%
-8.94%
-9.59%
-1.39%
SNEJF
24.10%
8.54%
3.11%
3.70%
PCRFY
29.70%
4.11%
1.45%
10.89%
SONO
46.10%
13.00%
13.60%
6.63%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Apple Inc. remains a solid investment in the technology sector, backed by strong financial metrics, a robust product lineup, and strategic growth initiatives. While there are challenges in the near term, particularly in Asia, the long-term growth potential, especially through continued innovation and market expansion, suggests that Apple will remain competitive. Investors should monitor developments in emerging markets and the performance of new products like Vision Pro closely.
Key Investment Factors
Growth Potential
Apple’s sustained growth in emerging markets and the expansion of its services business provide strong indicators of future performance. The anticipated launch of the Apple Vision Pro represents a new revenue stream.
Profitability Risk
Challenges remain in certain markets, particularly China, where competitive pressures and macroeconomic factors may affect sales. Additionally, inflationary trends in component costs could pressure margins.
Financial Position
Apple boasts a robust balance sheet with significant cash reserves, allowing for continued investment in innovation and shareholder returns. The company’s strong free cash flow supports its capital return initiatives.
SWOT Analysis
Strengths
Strong brand loyalty and customer satisfaction (99% for iPhone)
Large installed base of 2.2 billion active devices
Diverse revenue streams, particularly in services
Weaknesses
High dependency on iPhone sales for revenue
Challenges in maintaining growth in mature markets like China
Opportunities
Expansion into emerging markets with increasing demand
Introduction of innovative products like Apple Vision Pro
Growth potential in subscription and services segment
Threats
Intensified competition in the smartphone and technology sectors