Investing.com - Shares in Apple (NASDAQ:AAPL) were higher in premarket U.S. trading, rebounding from an initial dip following the iPhone maker's latest quarterly results.
Executives at the company said the group now expects sales to grow in the low- to mid-single digits in its fiscal second quarter. The guidance surpassed expectations and pointed to momentum in demand for the iPhone, Reuters reported, citing analysts.
The rosier outlook helped to assuage some worries around sales for Apple's flagship handset, which dropped marginally and missed estimates in its key holiday shopping quarter, due in part to the firm's new AI features not being available in some markets. Still, CEO Tim Cook said the enhancements, known as Apple Intelligence, are boosting sales.
Apple has taken a more cautious approach to AI compared to its Silicon Valley peers, choosing not to spend heavily on building out data centers. The strategy seemed to help insulate the stock during the DeepSeek-inspired market turmoil earlier this week, which led to steep drops in other Big Tech shares.
For the three months ended December 28, Apple reported earnings of $2.42 per share on revenue of $124.3 billion. Analysts polled by Investing.com had anticipated EPS of $2.36 on revenue of $124.12 billion.
However, iPhone sales, which account for nearly half of total revenue, fell to $69.14 billion from $69.70 billion a year earlier, short of estimates of $71.03 billion.
Apple's services unit, which includes its Apple Pay and App Store offerings, increased by around 14% year-on-year to $26.34 billion, compared with Wall Street estimates of $26.09 billion.
Meanwhile, in the latest sign that competition in China's smartphone market remains intense, Apple's sales in Greater China were down 11% to $18.5 billion, well below analyst projections of $21.57 billion.
In a note to clients, analysts at DA Davidson led by Gil Luria called Apple's first-quarter results "mixed", with "positive notes in various segments [being] slightly overshadowed by some negatives, primarily out of Greater China".
"That being said, Apple Intelligence is clearly benefiting iPhone growth in regions/countries where it is available. And while it is still being rolled out slower than initially anticipated, new regions will have their hands on Apple Intelligence soon, along with new features for existing users," Luria wrote.
(Yasin Ebrahim contributed reporting.)
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