Apple (AAPL) stock is trading in negative territory Friday even after the tech giant beat top- and bottom-line expectations for its fiscal fourth quarter.
In the three months ended September 28, Apple's revenue increased 6.1% year over year to $94.9 billion, boosted by 11.9% growth in its Services segment to $25 billion. The company said its earnings per share (EPS) improved 12% from the year-ago period to $1.64.
"Our record business performance during the September quarter drove nearly $27 billion in operating cash flow, allowing us to return over $29 billion to our shareholders [including through stock buybacks and dividends]," said Apple Chief Financial Officer Luca Maestri in a statement. "We are very pleased that our active installed base of devices reached a new all-time high across all products and all geographic segments, thanks to our high levels of customer satisfaction and loyalty."
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The results topped analysts' expectations. Wall Street was anticipating revenue of $94.6 billion and earnings of $1.60 per share, according to CNBC. Meanwhile, Services revenue came in just below expectations of $25.3 billion.
Apple also said that iPhone sales increased 5.5% to $46.2 billion, Mac sales were up 1.7% to $7.7 billion and iPad sales rose 7.9% to $7 billion. On the other hand, Wearables, Home and Accessories sales decreased 3% from the year-ago period to $9 billion.
Analysts were anticipating iPhone revenue of $45.5 billion, Mac revenue of $7.8 billion, iPad revenue of $7.1 billion, and Other products revenue of $9.2 billion.
Is Apple stock a buy, sell or hold?
Apple is up nearly 18% for the year to date on a total return basis (price change plus dividend) and Wall Street sees even more upside for the Dow Jones stock.
According to S&P Global Market Intelligence, the average analyst target price for AAPL stock is $241.84, representing implied upside of nearly 9% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Wedbush is one of the most bullish outfits on AAPL stock with an Outperform rating (equivalent to a Buy) and a Street-high $300 price target.
"In a nutshell, this was a rock-solid quarter for Apple, and the iPhone 16 launch appears to be off to a very good start," says Wedbush analyst Daniel Ives. "The step-by-step rollout of Apple Intelligence will result in a strong December quarter but will also flow into the March and June quarters, which should be good news for fiscal year 2025."
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