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.
if you go
The flights Fly Dubai, Air Arabia, Emirates, Etihad, and Royal Jordanian all offer direct, three-and-a-half-hour flights from the UAE to the Jordanian capital Amman. Alternatively, from June Fly Dubai will offer a new direct service from Dubai to Aqaba in the south of the country. See the airlines’ respective sites for varying prices or search on reliable price-comparison site Skyscanner.
The trip
Jamie Lafferty was a guest of the Jordan Tourist Board. For more information on adventure tourism in Jordan see Visit Jordan. A number of new and established tour companies offer the chance to go caving, rock-climbing, canyoning, and mountaineering in Jordan. Prices vary depending on how many activities you want to do and how many days you plan to stay in the country. Among the leaders are Terhaal, who offer a two-day canyoning trip from Dh845 per person. If you really want to push your limits, contact the Stronger Team. For a more trek-focused trip, KE Adventure offers an eight-day trip from Dh5,300 per person.
Results
2pm: Serve U – Maiden (TB) Dh60,000 (Dirt) 1,400m; Winner: Violent Justice, Pat Dobbs (jockey), Doug Watson (trainer)
2.30pm: Al Shafar Investment – Conditions (TB) Dh100,000 (D) 1,400m; Winner: Desert Wisdom, Bernardo Pinheiro, Ahmed Al Shemaili
3pm: Commercial Bank of Dubai – Handicap (TB) Dh68,000 (D) 1,200m; Winner: Fawaareq, Sam Hitchcott, Doug Watson
3.30pm: Shadwell – Rated Conditions (TB) Dh100,000 (D) 1,600m; Winner: Down On Da Bayou, Xavier Ziani, Salem bin Ghadayer
4pm: Dubai Real Estate Centre – Maiden (TB) Dh60,000 (D) 1,600m; Winner: Rakeez, Patrick Cosgrave, Bhupat Seemar
4.30pm: Al Redha Insurance Brokers – Handicap (TB) Dh78,000 (D) 1,800m; Winner: Capla Crusader, Bernardo Pinheiro, Rashed Bouresly
Results
5pm: Warsan Lake – Maiden (PA) Dh80,000 (Turf) 2,200m; Winner: Dhaw Al Reef, Sam Hitchcott (jockey), Abdallah Al Hammadi (trainer)
5.30pm: Al Quadra Lake – Maiden (PA) Dh80,000 (T) 1,600m; Winner: Mrouwah Al Gharbia, Sando Paiva, Abubakar Daud
6pm: Hatta Lake – Handicap (PA) Dh80,000 (T) 1,600m; Winner: AF Yatroq, George Buckell, Ernst Oertel
6.30pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 1,600m; Winner: Ashton Tourettes, Adries de Vries, Ibrahim Aseel
7pm: Abu Dhabi Championship – Listed (PA) Dh180,000 (T) 1,600m; Winner: Bahar Muscat, Antonio Fresu, Ibrahim Al Hadhrami
7.30pm: Zakher Lake – Rated Conditions (TB) Dh80,000 (T) 1,400m; Winner: Alfareeq, Dane O’Neill, Musabah Al Muhairi.
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
Sanju
Produced: Vidhu Vinod Chopra, Rajkumar Hirani
Director: Rajkumar Hirani
Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani
Rating: 3.5 stars
RESULT
Huddersfield Town 1 Manchester City 2
Huddersfield: Otamendi (45' 1 og), van La Parra (red card 90' 6)
Man City: Agüero (47' pen), Sterling (84')
Man of the match: Christopher Schindler (Huddersfield Town)
THE%20JERSEYS
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
57%20Seconds
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Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
