Apple Q4 earnings beat expectations but sees decline in sales in China

Apple reported fiscal fourth-quarter earnings after market close on Thursday that topped expectations, with sales from the company’s services offerings and Mac computers hitting quarterly records.

Video Transcript

MYLES UDLAND: Yeah, Seana, interesting quarter here for Apple. The stock looks like it's down a couple of percentage points in the initial after-hours trading session. Let's get to the numbers here.

From Apple again, beating on the bottom line, $0.73 per share. That's better than the $0.70 that was expected by the Street. Total revenue, $64.7 billion, better than the $63.5 that the Street was looking for.

But the miss here is on iPhone revenues, $26.44 billion in iPhone revenue during the company's fiscal fourth quarter. Street was looking for right around $27.1 billion. Now, it's not surprising they miss when we have a new iPhone coming out and some comments from Tim Cook in the release saying that they've seen a tremendous response to the new device, which, of course, they announced earlier this month. But that seems to be weighing on the stock here.

Just going through a couple other segments of Apple's business-- iPad revenues, $6.8 billion, better than the $6.1 the Street was looking for; Mac revenues, beating by a billion dollars, $9 billion in the company's most recent quarter; and the wearables, et cetera, line that includes Watch, the AirPods, all that stuff, $7.88 billion in the most recent quarter. $7.35 is what the Street was looking for.

So overall services revenue, beating expectations by about $700 million, $14.55 billion in the company's most recent quarter. But again, that Apple revenue number, just slightly lagging estimates. And does look like that is dragging down the stock here, off about 5% in the after hours.

DAN ROBERTS: And guys, so interesting, as Myles highlighted, the iPhone numbers there, because for how long have we talked about anticipating the 5G iPhone, which now is, at long last, coming, and it's right around the corner. And the bulls on Apple moving their narrative to services. Don't worry about the iPhone sales. How about services?

So sure enough, the earnings note here leads with records for Mac and for services. And by the way, speaking of services, I'm going to be very interested to hear about how that Apple One bundle that's being introduced is doing, what the company thinks about that, because I've talked about on this show I just don't think that's very appealing.

If you already subscribe to, say, Spotify, you're not going to cancel Spotify to do Apple Music to buy into the Apple bundle. But let's hear about that, services being the new thing. And then, interesting to note that Tim Cook calls it the most prolific product introduction period we've ever had-- of course, the new product introduction we're about to see, that 5G iPhone.

But I can just already hear the raging Apple bulls that we often have on our programming saying, don't worry about the iPhone numbers. That was because the upgrade cycle had slowed. Now that we're going to get the 5G iPhone, all those people will finally upgrade. It's all OK.

And look at the services. So you know, if you're an Apple bull, you can kind of pick which thing you want to cherry-pick and say is good news. Records for services, records for Mac. It's interesting.

JEN ROGERS: I knew something was up that they missed somewhere with the lead when you go with services and Mac revenue. Like, when is the last time we talked about the Mac? A desktop? So it just shows you, obviously, that there's something in here. It's not a huge miss on iPhone, but this is the iPhone company.

I think we need to get more details on what's going on with the bundle, as you said, Dan, and also this new fitness initiative. We've seen a lot of delays for the Watch and excitement over that. We've seen what's been happening with Peloton. So those are some areas that you're going to want to see. But I cannot believe I'm talking about the Mac.