Apple reported a 35.8 per cent annual decline in its fiscal fourth-quarter 2024 earnings, driven by a one-time charge of more than $10 billion related to a European tax ruling, while forecasting single-digit sales growth for the current quarter.
According to a regulatory filing, Apple paid a $10.2 billion income tax charge last month to settle a long-standing case, dating to 2016, concerning its tax practices in Ireland. The European Commission launched an investigation in 2014 into Apple’s tax payments in Ireland, where the tech giant’s EU headquarters is located.
Apple has been the subject of numerous lawsuits and has been involved in anti-trust investigations in Japan, South Korea and Europe.
Last month, the EU also told Apple to allow access to its tightly controlled iPhone and iPad operating systems to rival companies and third-party developers or face anti-trust fines.
The California-based company’s net profit in the previous quarter, which ended on September 28, dropped to more than $14.7 billion.
Revenue during the July-September period jumped 6 per cent on a yearly basis to $94.9 billion, beating analysts’ average estimates of $94.5 billion.
It was the company's record for sales in the September quarter.
After the earnings announcement, Apple stock dropped 2.08 per cent to trade at $221.20 a share in after-hours trading on Thursday.
It closed 1.82 per cent down at $225.91, giving the company a market value of $3.43 trillion. Its stock has jumped almost 22 per cent since the start of the year.
“This was one of the fastest-moving quarters for Apple in a long time, with several product roll-outs and updates making accountability more volatile than usual for the giant,” Thomas Monteiro, senior analyst at Investing.com, told The National.
During a call with analysts, Apple predicted “low to mid-single digit” sales growth during the December quarter.
Last month, Apple launched the iPhone 16 line-up, Apple Watch series 10, AirPods 4, and features for hearing health and sleep apnoea detection.
This week, the company released its first set of features for Apple Intelligence, “which sets a new standard for privacy in AI and supercharges our line-up heading into the holiday season”, Apple chief executive Tim Cook said.
iPhone sales returned to profit
Boosted by the launch of the latest iPhone 16 series, the company's premier product surged 5.5 per cent in the last quarter.
Net sales from iPhones stood at more than $46.2 billion, exceeded analysts’ estimates of $45.4 billion.
They accounted for nearly 48.6 per cent of the company's total revenue in the last quarter. Apple’s latest devices were released on September 20, providing about a week of new product sales in the quarter.
But iPhone sales dropped almost 1 per cent to nearly $39.3 billion in the June quarter.
The company’s total revenue from its services division grew nearly 12 per cent annually to almost $24.9 billion, while revenue from wearables, and home and accessories products dropped 3 per cent annually to more than $9 billion. It was a revenue record in the company’s services division.
“Despite slightly below general consensus, the 12 per cent growth in services revenue is also an overall positive long-term catalyst, as the division stands to benefit the most from the long-term AI adoption cycle that we expect to gain traction in the quarters ahead,” Mr Monteiro said.
Revenue from iPads and computers increased 4.5 per cent to pass $14.6 billion.
Stiff competition in China
The company’s overall sales, which include revenue from products and services, in the Greater China market (China, Hong Kong and Taiwan) remained flat on annual basis at $15 billion. However, it jumped 2 per cent on a quarterly basis driven by the launch of new iPhones and Apple watch last month.
Apple faced stiff competition in China from local brands such as Huawei, Vivo and Xiaomi.
The Americas region led Apple’s sales. It accounted for nearly 44 per cent of the company's total fourth-quarter revenue, with more than $41.6 billion.
It was followed by Europe, which added $24.9 billion – up almost 11 per cent annually – to the company’s revenue.
Japan and the rest of the Asia Pacific market added more than $13.3 billion to Apple’s fourth-quarter sales, an annual jump of 12.4 per cent.
Apple said its board of directors had declared a cash dividend, payable on November 14, of $0.25 for each share of the company’s common stock.
“Our record business performance during the September quarter drove nearly $27 billion in operating cash flow, allowing us to return over $29 billion to our shareholders,” said Luca Maestri, Apple’s chief financial officer.
He said, without disclosing the exact number, that Apple’s active installed base of devices reached a new all-time high across all products and all geographic segments in the last quarter.
Strait of Hormuz
Fujairah is a crucial hub for fuel storage and is just outside the Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond.
The strait is 33 km wide at its narrowest point, but the shipping lane is just three km wide in either direction. Almost a fifth of oil consumed across the world passes through the strait.
Iran has repeatedly threatened to close the strait, a move that would risk inviting geopolitical and economic turmoil.
Last month, Iran issued a new warning that it would block the strait, if it was prevented from using the waterway following a US decision to end exemptions from sanctions for major Iranian oil importers.
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2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
What is the Supreme Petroleum Council?
The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.
When Umm Kulthum performed in Abu Dhabi
Known as The Lady of Arabic Song, Umm Kulthum performed in Abu Dhabi on November 28, 1971, as part of celebrations for the fifth anniversary of the accession of Sheikh Zayed bin Sultan Al Nahyan as Ruler of Abu Dhabi. A concert hall was constructed for the event on land that is now Al Nahyan Stadium, behind Al Wahda Mall. The audience were treated to many of Kulthum's most well-known songs as part of the sold-out show, including Aghadan Alqak and Enta Omri.
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The five pillars of Islam
Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
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How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
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