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Apple Q1 2024 Revenue and Earnings Beat Estimates

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  • Apple’s Q1 2024 revenue and earnings beat estimates.
  • EPS is up 16% to a new all-time high of $2.18 per diluted share.
  • Sales in China disappointed – dropping 13%.

Last Thursday Apple announced financial results for its fiscal first quarter of 2024, which ended on the 30 th of December 2023. Revenue and earnings exceeded estimates, fuelled by record services revenue and almost 6% iPhone sales growth. Apple posted quarterly revenue of $119.6 billion, up 2% year over year, and an all-time record quarterly earnings per diluted share (EPS) of $2.18, up 16% year over year. The company also declared a cash dividend of $0.24 per share.

Apple’s services business saw significant growth of 11% rising to $23.12 billion in sales. The company’s wearables segment, which includes AirPods and Apple Watch sales, is still struggling and has declined 11% year over year to $11.95 billion, as weak demand persisted. Investors are becoming increasingly concerned that the same fate may await Apple’s $3,499 AR/AV headset, Apple Vision Pro.

The company reported 2% sales growth in the December quarter, reversing the trend of four straight quarters with annual revenue declines. Gross margin continued to rise and came at 45.9%, while net income was $33.92 billion, up 13% from the previous corresponding period.

A graph with blue squares

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Source: Company data as of 1 st of February 2024

Amid investors euphoria surrounding Meta and Amazon, Apple found itself on a rocky ground, after the company sales in its third largest market – China fell 13% for the quarter. Sales in China declined to $20.82 billion, falling short of analyst estimates of $23.53 billion, according to data from LSEG. China was a major growth driver for Apple, but fierce completion from Huawei and Xiaomi, and changing geo-politics are weighing. Investors’ concerns are mounting that the situation may not improve in 2024 either.

Despite the disappointing sales in China, Apple’s overall performance was robust, exceeding market expectations, with sales of iPhones reaching $69.70 billion.

A graph of stock market

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Source: TradingView

Apple’s share price rose 54% in 2024 and is almost flat YTD, marking the least “magnificent” performance after Tesla from the group of seven. The share price did not behave as investors would have liked and traded in a wide range between $165.67 and $199.62 over the past six months. This led to Microsoft to now dethrone Apple as the most valuable stock, with Microsoft reaching a market cap of $3.01 trillion vs. $2.90 trillion for Apple.

Despite the latest stagnation of the share price, the weekly chart suggests that better days might be ahead. The weekly Relative Strength Index (RSI) is firmly in the bull market range, suggesting that higher price levels are feasible over the medium-term. Once key resistance of $199.62 is broken, a strong dynamic rally towards $230.00 – $235.00 is likely to unfold.

As we look into the rest of the year, there are plenty of reason to be bullish about Apple’s growth prospects. The company has the world’s most valuable technology platform with over 1.2 billion users.

Despite the weaker sales in China, Apple’s long-term outlook remains positive given its technology leadership and sticky user base. Upcoming developments in generative AI, accelerating service growth, and new product launches such as Vision Pro are likely to sustain Apple’s growth.

Active traders looking to gain magnified exposure to Apple may consider Leverage Shares +3x Long Apple and -3x Short Apple ETPs.


Footnotes:
  1. Apple, Investor Relations
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Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.

Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.

Violeta Todorova

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Violeta joined Leverage Shares in September 2022. She is responsible for conducting technical analysis, macro and equity research, providing valuable insights to help shape investment strategies for clients.

Prior to joining LS, Violeta worked at several high-profile investment firms in Australia, such as Tollhurst and Morgans Financial where she spent the past 12 years of her career.

Violeta is a certified market technician from the Australian Technical Analysts Association and holds a Post Graduate Diploma of Applied Finance and Investment from Kaplan Professional (FINSIA), Australia, where she was a lecturer for a number of years.

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Julian joined Leverage Shares in 2018 as part of the company’s primary expansion in Eastern Europe. He is responsible for web content and raising brand awareness.

Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.

For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.

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Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.

He joined Leverage Shares from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.

Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.

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