Apple posts a surprise earnings beat on 22% jump in iPhone sales, but shares fall after hours on weak services revenue

【Financial News, New York = Reporter Lee Byung-chul】 Apple reported quarterly results that topped market expectations, driven by strong iPhone sales. However, its services business, long seen as a growth engine, fell short of expectations, sending the stock down about 4% in after-hours trading. Concerns over its artificial intelligence competitiveness and memory supply shortages also remain unresolved.
On the 30th local time, Apple said revenue for the second quarter, from April to June, came in at $109.42 billion. That was above the market forecast of $108.65 billion compiled by LSEG. Net income rose sharply to $29.79 billion, or $2.02 per share, from $23.43 billion, or $1.57 per share, a year earlier.
The biggest driver of the improved results was the iPhone. iPhone revenue rose 22% from a year earlier to $54.25 billion, beating the market estimate of $53.86 billion.
The Mac business also posted revenue of $10.35 billion, far exceeding the expected $8.74 billion. The wearables segment also slightly beat market forecasts.
By contrast, iPad revenue came in at $6.19 billion, below the expected $6.92 billion.
The most disappointing area for investors was the services business. Revenue from services, which includes the App Store, iCloud and Apple Music, totaled $30.74 billion, missing the market estimate of $31.22 billion.
The services segment has been a key pillar supporting Apple’s valuation thanks to its high margins and stable cash generation. As growth in the segment slowed, investors sold Apple shares in after-hours trading immediately after the earnings release.
Market attention is now turning to Apple’s AI strategy, which is set to be unveiled in September.
Apple plans to introduce a new iPhone lineup along with the next-generation Siri, which will use Google technology. The company has been seen as lagging behind Microsoft, Google and Meta Platforms in the generative AI race, making the upcoming product launch a key test of whether it can regain its AI competitiveness.
Apple is also facing a global shortage of memory chips. CEO Tim Cook recently described it as a "hundred-year flood," meaning an event that comes once in a century or less.
As competition intensifies to secure high-bandwidth memory for AI servers and advanced semiconductor production capacity, Apple has already raised prices for the Mac and iPad. It has not yet announced any plan to raise iPhone prices, but Wall Street is raising the possibility that iPhone prices could also increase later this year.
This earnings release is also significant because it is Tim Cook’s last before he hands over management control to John Ternus, the next CEO.



[email protected] Reporter Lee Byung-chul Reporter