Driven by iPhone sales, Apple made nearly $30 billion in profits… during the last quarter

Apple published results on Thursday that exceeded estimates for the second quarter of its delayed financial year (closed at the end of March), thanks in particular to the good performance of iPhone sales. Net profit stood at $29.6 billion (or 24 billion euros), up 19% year-on-year, according to a press release. Reported per share, an indicator favored by investors, it is $2.01, compared to $1.95 expected, according to a consensus established by FactSet.

Sales of iPhone, Apple’s flagship product, increased by 22% year-on-year, faster than the company’s total turnover (+17%), which reached $111.2 billion. The company’s boss, Tim Cook, quoted in the press release, reported “extraordinary” demand for the latest generation of the flagship smartphone, the iPhone 17.

During a conference call, the CEO indicated that between the launch of the new model, in September, and the close of the second financial quarter, at the end of March, the iPhone 17 had experienced the best launch in the history of the group in terms of turnover.

According to the IDC firm, the Apple firm gained market share on smartphones during this sequence, despite supply constraints mentioned by Tim Cook. In electronic trading after the close on Wall Street, Apple shares gained nearly 4%.

Apple also driven by services and China

If Mac computers, iPads or connected products each only recorded a single-digit increase, the services activity appears, once again, as the other engine of Apple’s growth (+ 16%). Services include the App Store, music (Apple Music) and video (Apple TV) streaming platforms, and remote data storage (iCloud).

Geographically, after a difficult period, China, a major market for the group, confirmed renewed vitality, with revenues 28% higher than those of the same period last year. For Jacob Bourne, analyst at Emarketer, it is a “remarkable” quarter.

Apple began a transition phase last week, with the announcement of the replacement of Tim Cook as general management by John Ternus, a former member of the group, from the beginning of September. “There is no one I trust more than John Ternus to lead Apple into the future,” Tim Cook, who will become chairman of the board once his successor is inducted, said during the conference call.

During the same presentation, John Ternus praised the “seriousness, levelheadedness and discipline” of his predecessor in terms of “financial decisions for the group”. He assured that he intended to “continue” on this path once in charge. An engineer by training, John Ternus currently supervises the design of physical products.

Tim Cook hands over at the “proper moment”

Tim Cook argued that there would be no “more propitious time” for a handover, because the group displays “extremely good” commercial performance and has an “exceptional business plan”. John Ternus inherits a group which is preparing several new products, including its first folding phone and connected glasses.

But it also comes at a critical period for the Cupertino (California) company, which has yet to prove that it can catch up with the artificial intelligence (AI) train. Apple has so far failed to take full advantage of the new capabilities of generative AI, unlike many of its competitors.

In January, it entered into a partnership with Google to use its Gemini AI model, before eventually launching its own. Observers expect first signs of improvement on this front during the major annual WWDC conference in early June.