Apple (AAPL) reported fiscal fourth quarter sales dipped 1% to $89.5 billion, with net income up 11% to $22.96 billion and EPS up 13% to $1.46. During the conference call, CEO Tim Cook stated: “We’ve continued to invest in the future and managed for the long term. And we've carved a path of groundbreaking innovations and delivered with excellence every step of the way,” notes Ingrid Hendershot, editor of Hendershot Investments.
By category, iPhone sales increased 3% to a September quarter record of $43.8 billion. Mac sales slumped 34% to $7.6 billion on tough market conditions and difficult comps with last year’s record sales, iPad sales declined 10% to $6.44 billion, Wearables, Home and Accessories sales declined 3% to $9.3 billion, and Services increased 16% to a record $22.3 billion.
By geography, Americas sales increased 1% to a September quarter record of $40.1 billion, Europe sales dipped 1.5% to $22.5 billion, China sales declined 2.5% to $15.1 billion on supply constraints for the new iPhone 15, Japan sales dropped 3.7% to $5.5 billion, and Rest of Pacific sales dipped 1% to $6.3 billion.
Operating margins increased to a record 45.2% from 42.3% last year, primarily due to product mix that more than offset the drag from foreign currency exchange. For the year, Apple reported sales and earnings declined by 2.8% to $383.285 billion and $97.0 billion, respectively, with EPS up slightly to $6.13 on fewer shares outstanding.
During fiscal 2023, Apple generated a stellar 27.5% return on assets and $99.6 billion in free cash flow, down 10.6% from last year, on working capital changes. During fiscal 2023, Apple returned $92.6 billion to shareholders through dividends of $15 billion and share purchases of $77.6 billion, including $15.5 billion repurchased during the September quarter at an average cost per share of $182.35.
During the past five years, Apple has repurchased more than $390 billion of its shares. Apple ended the fiscal year with $162.1 billion in cash and investments, $95.3 billion in long-term debt, and $62.1 billion in shareholders’ equity on its shiny balance sheet.
For the current holiday season quarter, Apple expects iPhone sales to be on par with last year despite one less selling week. Mac sales are expected to accelerate from the fourth quarter, booted up by new product launches. Gross margins are expected in the 45% to 46% range and operating expenses are anticipated in the $14.4 billion to $14.6 billion range.
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