Apple’s earnings surpassed Wall Street’s expectations, due to rising sales for its iPhone and services in its third fiscal quarter.
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The iPhone maker reported earnings per share of $1.57, a 12% year-over-year increase, on $94 billion in revenue, a 10% year-over-year increase, after the bell on Thursday. It reported net sales in the Americas of $41.19 billion and net sales in China of $15.36 billion.
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iPhone net sales garnered $44.58 billion while services net sales earned $27.4 billion.
The company also announced in its earnings report a cash dividend of $0.26 per share of Apple’s common stock.
“Today Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac and Services and growth around the world, in every geographic segment,” CEO Tim Cook said in a release.
Zacks Research projected that Apple would report $88.92 billion in revenue, showing 3.67% year-over-year growth, along with an earnings per share of $1.42. Analysts polled by FactSet estimated the tech giant would have a mean price target of $229.43. They projected Apple to report earnings per share of $1.43 with a revenue of $89.36 billion, Barron’s reported.
Despite Apple toppling Wall Street’s estimates for its fiscal third quarter, tariffs and the company’s AI plan remain top concerns.
Its stock was at $207.57 after the market closed, after opening at $208.49. After-hours trading was up about 3% following Apple’s earnings report. Its stock has been down almost 15% so far this year.
“This was a major step in the right direction for Cook and Cupertino with China the star of the show,” Wedbush analysts said in a statement after the earnings came out. “Now it’s time to address the elephant in the room…the AI strategy which remains absent while the rest of the tech world is laser focused on the AI Revolution at warp speed.”
The earnings come as investors remain concerned about Apple’s position in the artificial intelligence race. The company’s AI struggles were on full display at its Worldwide Developers Conference in June, where AI announcements were widely seen as underwhelming compared to competitors like Google.
A Bloomberg report from earlier this month found that Apple might bench its own generative AI technology and instead use either Anthropic or OpenAI’s tech to power a Siri update due next year. Apple had showcased its new AI features in TV commercials before postponing their launch until 2026. At the end of June, Apple was sued by shareholders for overpromising on its AI functions for Siri, Reuters reported.
While AI challenges loom, Apple found some bright spots in its China business this quarter. Apple’s iPhone sales in China are finally seeing some growth, albeit not enough to propel the company back to the top spot in the country’s smartphone market. A recent report found that Apple’s second-quarter iPhone sales placed the once market-dominating smartphone producer in fifth place in China’s market, trailing behind its biggest Chinese-based competitor, Huawei.
Adding to Apple’s China complexities are escalating trade tensions that threaten the company’s manufacturing operations. China, where Apple manufactures many of its products, currently has a tariff rate of 30%.
The trade war’s financial toll became clear during Thursday’s earnings call, when Cook revealed that Apple had absorbed $800 million in tariff costs during the June quarter, below the company’s earlier estimate of $900 million from May. Looking ahead, Cook warned that Apple could face $1.1 billion in tariff expenses in the September quarter if current policies remain unchanged.
The U.S. is in talks with the country to renegotiate a trade deal by Friday. Apple is transitioning its operations from China to India, with the goal of building all U.S.-sold iPhones in India by the end of 2026, but India is still negotiating with the U.S. on a new tariff rate. On Wednesday, President Donald Trump threatened to place a 25% rate on the country.
Jefferies analysts project Apple may end up making 18% of iPhone 17s in India in the second half of 2025.