Apple (AAPL) reported its first quarter earnings on Thursday, beating Wall Street’s expectations on the top and bottom lines, on strong iPhone sales.<\/p>\n
Apple’s iPhone revenue topped out at an all-time record of $85.3 billion in the quarter, well ahead of the $78.3 billion analysts were anticipating. The company recorded iPhone sales of $69.1 billion in the same quarter last year.<\/p>\n
But during Apple’s earnings call, CEO Tim Cook said that the global memory crunch is going to hit the company’s margins going forward. Apple projects margins of between 48% and 49% in Q2. Gross margins in Q1 were 48%.<\/p>\n
Apple stock edged lower early Friday, retracing an initial slight gain soon after the earnings release.<\/p>\n
The AI data center buildout has put a massive strain on the market for memory chips, which could impact the price of smartphones, laptops, and any other consumer or enterprise devices, unless manufacturers decided to swallow the cost.<\/p>\n
Overall, Apple reported earnings per share (EPS) of $2.84 on revenue of $143.8 billion. The Street was anticipating EPS of $2.68 on revenue of $138.4 billion, according to Bloomberg analyst consensus estimates.<\/p>\n
Apple’s Services business, its second-largest behind the iPhone, brought in $30 billion, in line with expectations. Analysts were calling for $30 billion. Mac and iPad revenue were $8.4 billion and $8.6 billion, respectively, while Wearables revenue hit $11.5 billion.<\/p>\n
Importantly, China sales improved to $25.5 billion during the quarter, climbing nearly 38% year over year. That marks a major turnaround for the region after sales declined in three out of the last four quarters.<\/p>\n
Apple’s earnings come after news broke that the company is acquiring startup Q.AI. The Information reports that the acquisition will cost Apple $2 billion, and that the company’s technology can read facial skin micro-movements, which could be used to help Apple support “non-verbal discussions” with an AI assistant.<\/p>\n
Earlier this month, Apple and Google (GOOG, GOOGL) issued a joint statement saying that the iPhone maker will use Google\u2019s Gemini models and cloud technology to power its AI efforts, including a more personalized Siri due out later this year.<\/p>\n Apple’s AI is lagging behind smartphone rivals Samsung, which also uses Google’s models. The company has been promising a fully revamped Siri since 2024, but has had to delay it until later this year due to quality issues.<\/p>\n Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at <\/em>@DanielHowley<\/em><\/a>.<\/em><\/p>\n For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here<\/strong><\/p>\n Read the latest financial and business news from Yahoo Finance<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/div>
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