Apple Q4 - record sales

Here's another 3rd quarter earnings update from one of our core portfolio stocks. Apple delivered record sales of $102.5 billion, up 8% year-on-year and ahead of expectations. Earnings per share came in at $1.85 versus an anticipated $1.77. iPhone revenue rose 6.1% to $49 billion, slightly below estimates due to supply constraints rather than weak demand, with most buyers opting for the high-end iPhone 17 Pro models.

Services revenue climbed 15% to $28.8 billion, pushing annual services income beyond $100 billion for the first time, an increasingly vital profit engine supported by the $20 billion annual search partnership with Google.

China remains a soft spot, with sales down 3.6% to $14.5 billion, but management expects a rebound as iPhone 17 demand accelerates.

The company expects December-quarter revenue growth of up to 12% (compared with 6% expected). On the earnings call, CFO Kevan Parekh predicted a massive festive season, their "best iPhone quarter ever", thanks to new AI tools anchored by a redesigned Siri, a smart-home ecosystem, foldable iPhones, and refreshed Macs with M5 and M6 chips.

Apple may only be up 10.3% year-to-date, but never doubt its resilience and ability to print cash for patient shareholders. This is a steady, cash-rich business and still the benchmark for hardware innovation.

Apple's cash flow and pricing power continue to shine. Despite tougher competition, the company's ecosystem stickiness and expanding services margins make it a core compounder in our portfolios.